Columbia Business School Students Consult Female Entrepreneurs in Africa
Twelve Columbia Business School students had an unforgettable experience over winter break when they traveled to Kenya, Cameroon, Ghana, Zambia, and South Africa to consult to five female entrepreneurs. The trip was organized in New York by Diana Yousef, president of the Managers in International Development Initiative (MIDI) at Columbia Business School, and in Kenya by Peter Kibiriti, a Kenyan graduate of Columbia Business School and successful Kenyan entrepreneur. Professors Murray Lowe and Paul Tierney as well as the Lang Center and Chazen Institute also played very important roles in making the trip possible. One of Peter Kibiriti's businesses in Kenya is the Enterprise Africa magazine, a quarterly magazine devoted to entrepreneurship in Africa. The magazine organized an award ceremony in 2001 that recognized pioneering female entrepreneurs in Africa. One part of the award was receipt of the consulting services of Columbia Business School students.
The twelve students began their adventure in Kenya on January 4 with a weekend planning workshop led by Peter Kibiriti and professors from the local Catholic University. The students were welcomed to Kenya by gorgeous weather: 70s, sunny, and not a trace of humidity. The workshop itself took place outside of Nairobi in a lush landscape where Karen Blixen of Out of Africa fame once lived. The weekend included a first taste of nightlife in Nairobi, as well as a safari in the Nairobi National Park. There students observed giraffes, buffalo, antelope, ostriches, baboons, monkeys, and a lioness on the prowl amid the classic African savannah landscape of rolling plains and flat-topped acacia trees.
Alas, the weekend had to come to an end, and work needed to get done. The teams of students dispersed on Monday by plane to Cameroon, Ghana, Zambia, and South Africa, with one team remaining behind in Kenya. The Kenyan team of Joshua Hubbert, Fred Brust, and Andrew Bauer consulted to Mary Okelo, the woman who founded one of Kenya's most successful private schools. Mrs. Okelo was the first to perceive the market demand for private schooling in Kenya because of problems in the public education sector, and demonstrated that high quality and excellence in education can go together with making profits. The Cameroonian team of Prithvi Prabhu and Mindy Cohen consulted to Rebecca Enonchong, the founder of Applications Technology Inc., a U.S.-based implementer and maintainer of corporate Oracle databases. While she has lived in the U.S. for years, Rebecca is originally from Cameroon and is currently establishing branches of her business in Cameroon and Ghana. The key challenge for Rebecca is to show that there is a market for her company's services in these emerging markets and then to successfully tap into that market. The Zambian team of Myka Reinsch and Kendall Dwyer consulted to Sylvia Banda, a woman who has founded, and now successfully runs, a series of cafeterias, a catering business, a catering college, and a guesthouse. Her immediate goal is to consolidate these different businesses in one location and to eventually open a five-star hotel in Lusaka, the capital of Zambia. The South African team of David Zehner, Mark Rothert, and Suzanne Bellet consulted to Jean Davidson, the founder of South Africa's first black-owned commercial rose farm. Jean's key challenges are competing in the international market against much larger operations both in South Africa and in Kenya. Finally, the Ghanaian team of Bion Bartning and Anna Fairclough consulted to Dr. Esther Ocloo, the founder of the first food canning and processing factory in Ghana. Over time, Dr. Ocloo has become increasingly involved in philanthropic pursuits, including founding Women World Banking internationally as well as numerous charities and training centers in Ghana.
After a very full week of meeting with the entrepreneurs themselves, others in their organizations, their competitors, their customers, bankers, development agencies, and government officials, all twelve Columbia Business School students returned to Nairobi, Kenya. The second week started off with two days in which students discussed with one another their different experiences and drafted case studies about their entrepreneurs. These case studies, which are still being fine-tuned, will be the first of their kind, and will be available for use both at U.S. business schools as well as African universities. The group took breaks for a formal lunch with the American ambassador and a visit to the Kenyan stock exchange (52 companies listed).
Following these two days of activity, Professor Murray Lowe conducted a three day workshop for local Kenyan entrepreneurs who are just now starting their businesses. The students paired up one-on-one with these entrepreneurs to help them with the nuts-and-bolts of defining the market they are going after, doing break-even analysis, and understanding their cash flow needs for their first year of operations.
Certain themes were highlighted in both the first week with the successful, established entrepreneurs and in the second week with entrepreneurs just starting out. First, corruption and dysfunctional government are major obstacles for entrepreneurs in Africa. For example, in Kenya it is commonplace for politicians or government officials to demand equity stakes in any business that seems to be successful for either little or no actual cash infusion. Another example: Mrs. Okelo stated that it had been common for police officers to jump into her school buses and demand money before they would let the busses continue to school with the children.
Second, financing a business is extremely difficult in Africa. Because of corruption and general instability, interest rates are very high, often exceeding 20% annually. Even if one can get a loan approved, it is extremely costly to take on debt to grow a business. Furthermore, institutional arrangements facilitating outside investors making equity investments in a business are few and far between, the Kenyan stock exchange notwithstanding.
Third, there is a "missing middle" in Africa in terms of medium-sized businesses. Very few small family-owned businesses of one to fifty people grow beyond that size. This is partially due to the absence of healthy capital markets for funding firm growth. However, there also seemed to be cultural barriers to firm growth across the visited countries. Individual entrepreneurs or families are often content once their business is generating enough cash flow to support them in a comfortable lifestyle. Once that has been accomplished, they cease growing the business. This contrasts starkly with the business culture in the U.S. that emphasizes growing a business as fast as possible and accumulating as much wealth as possible in the process.
These are just a few of the specific lessons that the team of students took from the experience. However, the students also learned in general that committed entrepreneurs can be and are successful in Africa. The students were also inspired to by the special challenges that the female entrepreneurs had overcome to be successful on a continent with a male-dominant business environment.
If all of this sounds very cerebral, rest assured that your Columbia Business School comrades made time for a good time. The group hit the Nairobi nightlife every night of the second week. Various members of the group made time to do a safari in the Masai Mara, to visit Lake Nokuru with its one million flamingos, to see Victoria Falls, and to relax on the Indian Ocean with its white sand beaches and turquoise waters. While it is too late for you second-years who did not make it, any first-years reading this should definitely sign up next year for the experience of a lifetime.