Clay Water Brick - Book Summary

Embark on a journey: The entrepreneurial exit from the labyrinth of poverty

Consider this scenario. You're lounging in front of your TV when an advertisement from a charity organization pops up. There's a famous, tear-streaked face pleading with you to help alleviate the dire conditions in an underprivileged corner of the world. Now, you might feel a twinge of sadness. Perhaps, you'll even reach out and make a small donation. But, before long, life goes on, the celebrity retreats to their plush life and the cycle of poverty remains unbroken.

Is there a better solution out there?

Let's delve into the wisdom of someone who's been on the front lines of poverty eradication in the developing world for a substantial length of time. This summary, rooted in first-hand experiences, offers a beacon of hope — a strategy to eradicate poverty once and for all. Instead of continually funneling money into traditional charities, the answer lies closer to home: local entrepreneurs harnessing the power of innovation and economic growth.

As we dive deeper into this summary, we'll uncover:

- The uplifting tale of a man who quite literally used the earth beneath his feet to lift himself out of impoverishment;

- A real-life crisis scenario where the author's platform navigated the treacherous waters of a massive embezzlement scandal; and

- How the innovative concept of microlending might just hold the key to unlocking the global poverty conundrum.

Emerging entrepreneurs from developing nations: A beacon of hope amid staggering poverty

Picture an entrepreneur. You're probably thinking about a sleek office, sharp suits, luxury cars, and an abundant bank account. But, that's just one facet of entrepreneurship. Some of the most resourceful, innovative, and inventive entrepreneurs are battling the stark realities of life in the world's poorest regions.

In recent times, the entrepreneurial flair of individuals from developing countries has been a shining beacon of optimism. Contrary to popular belief, entrepreneurship is far from exacerbating the wealth gap; in fact, it's a potent weapon in the fight to bridge the economic chasm.

Could entrepreneurship be the panacea for poverty, far more impactful than traditional approaches?

Take a moment to ponder how most charities operate. A well-intentioned person parts with their hard-earned money, hoping to make a difference. Yet, the specifics remain obscure — How is the money used? Who does it benefit? How effective is the assistance provided?

Those seeking a deeper engagement with a charity might volunteer. The author, for instance, volunteered in various institutions, from hospitals and sports clubs to soup kitchens and halfway houses for teen mothers. Yet, there remained a nagging sense that the impact was transient, not lasting.

Furthermore, watching the same faces return daily for aid, with little inclination to alter their circumstances, can be a demoralizing experience for volunteers. While charities undeniably play a crucial role in society, there are other ways to instigate change.

Think about the old saying: "Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime." This wisdom hit home for the author while working with Californian nonprofit, Village Enterprise, in East Africa. Engaging with local small business owners, understanding their lives, and witnessing the transformation brought about by Village Enterprise's financial sponsorship, a single truth was apparent:

People had the ideas, drive, and ambition to combat poverty. What they lacked was financial support. This realization sparked a revolutionary approach to alleviating the hardships of impoverished communities. Stay tuned as we delve into the birth and evolution of this groundbreaking strategy.

The power of microlending: A compelling weapon in the global battle against poverty

The grim reality is that billions of people across the globe languish in the clutches of poverty. It often seems like the situation is spiraling out of control every time we catch up on the news. Amid such adversity, how can we contribute to the cause? Donating to charities and raising awareness is a start, but it often feels like an enormous financial outlay is the only viable solution to lift the downtrodden out of their predicament. But is it?

While eradicating poverty entirely in one fell swoop might seem like a daunting, if not impossible, task, we could focus instead on alleviating poverty on a smaller scale — one individual, one family, or one community at a time. Not only is this approach more feasible, but it also requires significantly less financial backing. The secret weapon in this strategy? Microlending.

Microlending, a lending system that came into existence a few decades ago, owes its birth to Dr. Muhammad Yunus and his Grameen Bank in Bangladesh. Dr. Yunus started the trend of offering small, low-interest loans to budding entrepreneurs, thereby enabling thousands of villagers to kickstart their business ventures.

Today, Grameen Bank is a Nobel Peace Prize laureate and boasts a whopping 7.5 million borrowers. The microfinance model envisioned by Yunus has now been adopted by countless organizations worldwide striving to fight poverty. Among them is Kiva, a microlending platform developed by the author.

Fuelled by her personal experiences witnessing the harrowing reality of poverty in Africa, the author launched Kiva, revolutionizing the microlending landscape. Kiva acts as a bridge, connecting entrepreneurs from developing countries with lenders from more affluent regions. These entrepreneurs, whether they require funds for new machinery, livestock, or other business investments, receive financial aid from willing sponsors.

The journey of these businesses, alongside their repayment schedule, is shared with the lenders. Since its inception in 2005, Kiva has facilitated the circulation of over $600 million in microloans to entrepreneurs globally.

Resourcefulness trumps resources: The indomitable spirit of an entrepreneur

At first blush, a tech-startup founder in Silicon Valley and a village craftsman peddling building materials in East Africa appear poles apart. The gulf between the resources at their disposal is indeed significant. But beneath this stark disparity, there lies a shared attribute — a burning entrepreneurial spirit.

No matter your starting point or circumstances, it's not the resources you possess but your resourcefulness that truly sets you apart as an entrepreneur. Let's take the example of Patrick from Uganda, a man who started with absolutely nothing. After a rebel invasion claimed his family, Patrick and his surviving brother sought refuge with distant kin.

Patrick's life was one of hardship — an orphan without education or wealth. All he had were his hands and the ground he stood on. Yet, it's these very assets he used to eke out a living. He dug for clay, fashioned it into bricks, and sold these to builders, thereby earning his bread.

Patrick's early endeavors yielded crude, imperfect bricks. But as time passed, his skills improved and small profits began trickling in. He smartly invested his earnings into new tools. Years of relentless hard work later, Patrick's once small operation had transformed into a burgeoning business. Not only did he supply much-needed building materials to his community, but he also provided employment for himself, his brother, and several others.

Patrick's inspirational tale is a testament to the fact that there's no better time to embark on a journey than the present. Similarly, when the author decided to create Kiva, her only real asset was her hands-on experience. Lacking influential contacts and reputation, and fresh from a rejection from Stanford Business School, she had a mountain to climb.

Despite lacking an MBA and having limited disposable income, the author was resolute in bringing her vision to life. She found an ally in her husband, and together they began work on their ambitious project. A year later, with a smattering of loans and a basic website, Kiva was born.

The author could have waited for a more opportune moment to launch her business, but she's relieved she didn't. In retrospect, she realizes that waiting for the 'right' time might have derailed her entrepreneurial journey altogether.

Unwavering mission: The beacon guiding your entrepreneurial voyage

Embarking on an entrepreneurial journey can be likened to setting sail on the high seas. You may have charted your course meticulously, but the mighty currents of uncertainty are bound to tug you into unplanned territories. To navigate these waters and return to your path, a clear vision of your destination is indispensable.

In the nascent phase of Kiva, the author crossed paths with two entrepreneurial figures harboring a similar vision. They brought to the table an impressive network and unbridled ambition, and suggested a collaboration. Although their aspirations and principles slightly diverged from those of the author, she agreed to this alliance.

But the partnership soon hit turbulent waters. The Kiva founders felt side-lined and it appeared that their partners were intent on venturing into new markets. The original mission of Kiva — fostering connections between entrepreneurs and sponsors, facilitating impactful changes in communities — began to blur.

Recognizing this, Kiva severed ties with these partners and reset its course — a move that would yield tremendous results. The two entrepreneurs persisted in their path, eventually launching a rival platform. However, their offering paled in comparison to Kiva. The episode underscored the pivotal role of a well-defined mission in guiding entrepreneurial endeavors and informing critical decisions.

Transparency: The cornerstone of enduring loyalty and trust

Showcasing our triumphs for the world to see — be it the perfect graduation snapshot on Instagram or impressive quarterly results shared with investors — is a temptation few of us can resist. After all, we all like to be perceived as successful. But does this tell the whole story? The flipsides of our journey, the less glamorous parts, often go untold.

Why is this so? Nobody wishes to be viewed as a failure, especially not in front of supporters or followers. However, the truth is that a glossy facade of success doesn't earn people's trust. Authenticity and transparency do. These are the traits that nurture loyalty and commitment among customers.

At Kiva, fostering direct connections between lenders and entrepreneurs is foundational. Sponsors are kept in the loop about the progress of the businesses they back. It's this transparent approach that differentiates Kiva from the faceless methods employed by traditional charities, encouraging users to continually support Kiva and spread the word about the platform.

Transparency served Kiva well during their maiden PR crisis as well. Kiva discovered that a partner organization in Uganda had swindled over a hundred thousand dollars in loans by fabricating borrower profiles.

Faced with the disappearance of the funds, Kiva was at a crossroads. The management decided to face the crisis head-on with unflinching honesty. They issued an apology to the lenders, admitting that they had been overly trusting.

Much to Kiva's relief, the lenders responded with empathy, expressing their appreciation for Kiva's forthrightness and assuring continued support. In a situation that could've potentially toppled Kiva, the organization held on to the truth. This commitment to transparency not only helped them weather the storm but also solidified their standing.

Collaboration: The wind beneath your entrepreneurial wings

Launching a business is akin to braving a strenuous uphill climb. Why take it on singlehandedly, when joining forces can lighten the load? Two minds, after all, are superior to one. Enlisting the support of a dedicated team can help you navigate even the most challenging impediments. Embrace collaboration without hesitation!

An example of the transformative power of teamwork is demonstrated in the story of Clay, a candy store owner in Honolulu. In spite of treating every customer as part of his ohana (the Hawaiian term for "family") and boasting a strong customer base, Clay grappled with financial instability.

That's when Clay's nephew Bronson, a business student brimming with enthusiasm, proposed a partnership. Together, they set out to revitalize the store. With the aid of the crowdfunding platform, ProFunder, they managed to raise over fifty thousand dollars, enticing sponsors with exclusive tasting events and customized treats.

The campaign was a hit, leading to a spruced-up store and a robust marketing strategy. Today, Uncle Clay’s House of Pure Aloha is a success story, both in terms of reputation and finance.

The author herself attests to the magic of teamwork, though she had to warm up to it initially.

After Kiva's spectacular initial success, the author realized the need for a dynamic team to keep pace with the growing demand. Together with her husband, she roped in a group of trusted friends to form Kiva's core team. This team was much like a family, with many even quitting their jobs to devote themselves to Kiva full-time.

Initially, the author found it challenging to share her "baby", Kiva, with others. She was hesitant about the flurry of novel ideas and suggestions pouring in from the team.

But, before long, she recognized that it was the team that was breathing life into her project. Each member contributed their unique talents to Kiva - programming skills, branding acumen, or vital business contacts. Gradually, she began delegating responsibilities, letting her team members excel in their respective domains. This marked a turning point for Kiva, sparking its growth trajectory and leading to an ever-expanding team.

Embracing trial and error: The hidden key to sustained success

When the inaugural iPhone hit the market, it was hailed as an avant-garde technological marvel. Yet, compared to its latest counterparts, it seems strikingly rudimentary. This just goes to show that even a tech giant like Apple doesn't strike gold on the first try. The iPhone has constantly evolved since its debut.

Innovative ventures are seldom the offspring of an instantaneous burst of genius. Rather, they are the fruits of consistent innovation and refinement spread over years.

This is a lesson that Shona learned during the initial stages of her entrepreneurial journey. A determined mother, Shona was resolute about creating custom devices to enable her severely disabled daughter, Shelly, to carry out basic physical activities. In Shona's home country of South Africa, the selection of aids for the disabled was minimal.

This lack of resources rendered even basic tasks like sitting up straight at a table unfeasible for Shelly. Shona was adamant about changing this scenario.

Armed with some sculpting experience, Shona began to devise rudimentary designs that provided temporary solutions to Shelly's challenges. Thanks to Shona's relentless efforts, these makeshift devices eventually evolved into equipment that transformed Shelly's life.

News of Shona's talent soon spread, and other caregivers facing similar challenges sought her help. It wasn't long before Shona's skills were catapulted to a professional level, marking the birth of her company, Shonaquip.

Fast forward to today, Shona employs scores of technicians and therapists, and her intuitively designed inventions have enhanced the lives of 70,000 disabled children. Starting from scratch and cycling through countless design iterations, Shona accumulated years of expertise. This wealth of experience serves as a robust foundation, propelling her business towards growth and prosperity.

Daring to take the plunge: The risk factor in business ventures

Every entrepreneurial journey presents a unique array of hurdles. But there's one critical decision that all entrepreneurs invariably confront — the decision to take a gamble and start a business. In venturing into the world of entrepreneurship, they willingly invest their time, money, and energy into an uncharted territory.

Consider the story of Katherine, a participant of a Village Enterprise workshop in Tororo, Uganda. Armed with basic business know-how, Katherine identified fish selling as a promising business avenue given the high demand. Deciding to tap into this potential, she began buying fish from a local intermediary.

While this approach was profitable, her earnings were capped due to the steep purchasing cost of the fish. Katherine realized that to truly maximize her profits, she would need to procure the fish directly from the source. This would entail an expensive and perilous solo bus journey to the lake, which was indeed a significant risk. But this risk held the promise of business success.

With the one hundred dollar sponsorship she received from Village Enterprise, Katherine managed to make the trip to the lake and return with a bounty of fresh, inexpensive fish. This maneuver boosted her profits considerably and charted a new growth strategy for her business. Had Katherine refrained from taking that initial risk, her business would not exist today.

Succeeding in the face of risk during the nascent stages of business encourages entrepreneurs to keep embracing calculated risks as their ventures mature. Often, they end up surpassing their own expectations, propelling their business further than they had ever envisioned.

Wrapping it up

The concept of microlending has propelled numerous budding entrepreneurs in emerging societies to not only redefine entrepreneurship but also contribute significantly to the global battle against poverty. By embodying values like integrity, courage, tenacity, transparency, and most importantly, resourcefulness, fledgling enterprises can rise against the tide and taste success.