NextBillion.net - Blog: Telecommunications and IT

Inside the Entrepreneur's Studio: A Conversation with Mo Ibrahim

Mon, 22 Jun 2009 13:49:35 +0000

Authored by: Tayo Akinyemi

Most of you are probably familiar with the story of Dr. Mo Ibrahim, the British-Sudanese entrepreneur who built Celtel (now Zain) into one of the most successful telcos on the African continent (and beyond). Then you can imagine my surprise when the following email landed in my inbox:

Dr. Mo Ibrahim, founder of Celtel and a 2008 Time 100 honoree, will be on campus next week as the 2009 Bartels World Affairs Fellow. Dr. Ibrahim is one of Africa's most successful businessmen and created the Mo Ibrahim Foundation in 2006 which awards the Achievement in African Leadership [prize].

I have been fortunate enough to secure a portion of Dr. Ibrahim's time to attend Monday's class. If you are interested, I would love to have you join us for a continental breakfast from 8:00-8:40 am, followed by discussion from 8:40-9:55 am.

Unbelievable-I couldn't believe my good fortune. Never would I have imagined that I'd be within twenty feet of an entrepreneur of Mr. Ibrahim's caliber. Not only is African telecom one of my primary interests, I'd been enamored with the CelTel/Zain story since completing a strategy project about its rival, MTN. Furthermore, I was intensely curious about Mr. Ibrahim's motivation for creating his foundation.

On the surface, his two careers, telecom entrepreneur and democracy advocate, seemed rather disparate. However, (as I was recently reminded), the role of government is critical to the success of business in Africa, particularly when it comes to infrastructure. Given the critical role that government officials play in the distribution of licenses, it's little wonder that he linked the two.

Those of us who attended this session were treated to an Inside the Actor's Studio-style interview conducted by Mark Milstein, Director of the Center for Sustainable Global Enterprise. Please read on for a smattering of what we discussed. (Note: This is not a verbatim transcript. It's just a summarized excerpt of a much longer conversation.)

Mark Milstein:
How did you spot an opportunity for telecom in Africa?

Mo Ibrahim:
People thought that Africa was too dangerous. People didn't want to work in Uganda because of Idi Amin despite the fact that he'd been gone for more than 15 years. Cynicism and romanticism co-existed. Both are true, but the larger picture is also true. For example, everyone knows about Mugabe, but this is an incomplete, inaccurate picture. Life can be as boring in Africa as it is in Ithaca-people get up, go to work, etc. (Who knew Mo Ibrahim had such a wry sense of humor!)

Mark Milstein:
Why was the success of the mobile phone so dramatic in Africa?

Mo Ibrahim:
First, there was a high degree of equity in the phone call and secondly, the market was defined. There were limited ways for people to communicate; often, they had to meet in person. In Kinshasa, people used messengers. If you didn't live in the same town, it could take ten days just to tell your mother that you were engaged.

Mark Milstein:
Did you realize that cell phones would be so powerful?

Mo Ibrahim:
They definitely exceeded our expectations. They are essential for trade and education and are a tool for democracy and openness. Zimbabwe and Kenya represent a great victory; people stopped elections from proceeding [due to their ability to communicate about what was going on].

Mark Milstein:
What quality made it difficult for companies to learn how to operate successfully in this space?

Mo Ibrahim:
Business people who were shifty and behaved illegally made things challenging. People warned us that it wasn't possible to do business with integrity. But at CelTel, any check for more than 30,000 pounds had to be signed by the board. This was our silver bullet because the clout of the board discouraged bribery. At the end of the day, the level of transparency and quality of corporate governance enhanced the value of the company. When we sold the company we received 8.5 times EBITDA. In fact, Celtel's story is taught at Harvard Business School as an example of how strong corporate governance attracts a premium.

Mark Milstein:
How did the state of leadership help you determine what markets to enter?

Mo Ibrahim:
We looked beyond the condition of the market to governance. We've paid for licenses but then walked away. We delayed entry in another place due to corruption. Don't let short term gain push you to do something. In the end, it will harm the value of your business.

Mark Milstein:
What advice do you have to give for people starting business with a social value?

Mo Ibrahim:
Any business has social value, otherwise it's unethical. For example, prostitution and gambling have no social value. Creating jobs and looking after the community are important. A business cannot thrive in a community that is failing. Social value should not be invoked as an excuse to do lousy, unsuccessful business. Mixing the two is a recipe for disaster. The sole purpose of business is to generate value generally, not just the kind that is social in nature. As long as the company is ethical, there is social value.

Mark Milstein:
Why decide to promote democracy?

Mo Ibrahim:
Democracy is terrible, but it is the least evil system we know. Democracy, transparency, good government, rule of law, and strong law enforcement are all very important.

Mark Milstein:
A society of entitlement compounds the likelihood of success for the wealthy.
Doesn't the Prize for Achievement in African Leadership give money to the already wealthy?

Mo Ibrahim:
The first part of the statement is correct, but we we're not dealing with wealthy, crooked people. Once you finish the job as head of state, you leave your means behind. Tony Blair charges $500M per speech and $2M to sit on Merrill Lynch's board. But many leaders can't rent an apartment in the capital where they were living because they can't afford to. Also, we're not paying people excessively.

Well, that's all she wrote. Not surprisingly, the dialogue during this session was much richer than I could convey in this excerpt. Of particular note was the James Lipton-like approach to the initial round of questions. Thanks to that, I now know that Mo Ibrahim likes the sound of babies, admires Madame Curie (complete with poster on the wall), and detests hypocrisy. How's that for a 360 degree view of a leader?

Will the next "thought leader" please stand up? - Part 2

Tue, 31 Mar 2009 23:00:00 +0000

Authored by: Mark Beckford

This post is the second part of a two-part series on thought leadership for computer makers in emerging markets. Part 1 focused on the companies striving for thought leadership over the last several years ... OLPC, Intel, Microsoft and AMD. Part 2 discusses the characteristics companies will need to develop if they want to become a "thought leader.

What is a thought leader?

There is a great quote from an unknown author that I believe is a perfect definition of thought leadership:

Thought leadership is recognition from the outside world that a company deeply understands its business, the needs of its customers, and the broader marketplace in which it operates. Thought leadership is built on what others say about you. When you have it, companies look to you for insight & vision, journalists quote you, analysts call you.

So you can't grant yourself thought leadership status. Others must seek you out due to your perceived expertise and credibility in a specific niche. Was Negroponte, Intel, Microsoft, or AMD ever a "thought leader" based on this definition? I think so. Negroponte got Koffi Anan, the UN Secretary General at the time, to endorse his effort. Craig Barrett of Intel, shortly after World Ahead, got invited to chair the UN's Global Alliance on Information Society Development (UN GAID).

The deeper question I have is: did coming up with a fancy name with supporting pillars and proof point make a difference? Probably. Whether one has expertise or not, creating awareness of this expertise is key to establish credibility, one needs a "messaging platform" and a communication strategy. This is really marketing 101. What's your message and how do you communicate it?

OLPC had a very simple messaging platform. "One Laptop per Child." Every child in the world has a laptop. As you peel back the onion, you find it is not just a cheap laptop, but a laptop with content and learning tools tailored for the unique needs of school children. Then one needs to get that message out through a massive marketing communications campaign, including PR, events, and direct engagement with key influencers worldwide. OLPC did this through Negroponte's "celebrity" status in the industry and his relentless global travels.It was harder for Intel. Because we did so many things in emerging markets, we were lost in the complexity and comprehensiveness of what was already being done. Intel needed to:

Simplify and put more focus on specific areas that supported the goal of accelerating computer access to those that couldn't afford it (e.g. training teachers).
Develop the proof points to support these focus areas, and fill in the gaps of what Intel wasn't doing enough of (e.g. not training enough teachers)
Communicate this focused and simplified story more effectively. (e.g. improving a student's education by training more teachers and getting more computers into classroms)
Say it over and over again. (e.g. after the initial global launch, we re-launched World Ahead country-by-country and announced PC donations to schools and a specific number of teachers we would train).

Simple, right? It would seem so on the surface, but it took many man-hours over many months to get this right.

The leadership void

I think a leadership void currently exists in this space. I also think this void will only get bigger. Thought leadership is not based on market share. It is based on perception. Perception can be short-lived and fickle. The emerging market initiatives from Intel, AMD, OLPC, and Microsoft have been around for several years. Time will erode the luster of these initiatives because:

Hype always fades away (applies to all)
Excessive public scrutiny heightens missteps (OLPC)
The program loses its initial focus and evolves and becomes more complex (Intel)

On point #3, when intel turned World Ahead into a sales division, the World Ahead charter was expanded to encompass "all-things emerging markets" at Intel. (e.g. selling high-end processors in emerging markets while also pushing affordable computing.) In addition, as companies come under increased financial pressure from plummeting computer demand and shrinking IT budgets, these programs will come under increased scrutiny. When AMD's business began struggling against its rival Intel in late 2006, it had to cut back significantly on 50x15. Ultimately, AMD spun AMD off as an independent foundation. Will something similar happen at Intel and Microsoft? .Possibly. In tough times, companies' often put renewed focus on their "core" or mainstream business, Strategic, long-term initiatives often get left on the cutting room floor.

Who will fill the leadership void?

I think the time is right for somebody to fill this void. I mentioned in a previous post on my blog on this "mother of all disruptions" (the economic crisis) will create new losers and winners, Emerging markets are definitely struggling, especially those that are over-reliant on exports. Budgets are being cut. But stimulus investments could offset those cuts. Technology is still perceived as an important component of economic development. Thus, I believe the opportunity is still there. But I think governments, development banks and NGO's will be receptive for something new and different. All the "thought leaders" I have mentioned thus far have done a tremendous job convincing the world that computing is an important part of education and economic development. In my recent travels, every Ministry of Education I have visited has an ICT department. Large bids for computers are still being tendered. I believe the following criteria must be met for somebody to become a candidate for thought leadership.

The technology or product/solution from the candidate must be a "disruptive innovation." Something that truly changes the game for computers in terms of technology, business model, affordability and unique value add.
The potential candidate can't do it alone. It will need to create or lead a consortium of private and public entities that is build around a common purpose or goal.
Any new thought leader must show tangible results. OLPC, Microsoft, Intel and AMD all had grand stories and goals. But have they truly delivered to these goals? A thought leader built on press announcements vs. results will be heavily scrutinized. The negative attention in the press and blogosphere on Negroponte is a great example of this.
They will need to follow the four steps outlined above in creating a thought leadership platform, specifically: 1) a simple and focused messaging platform, 2) tangible and real supporting proof points, 3) an effective communications strategy, and 4) global and local communications. .

So who are your candidates for the next thought leader?

Will the next "thought leader" please stand up? - Part 1

Tue, 31 Mar 2009 12:00:00 +0000

Authored by: Mark Beckford

Four years ago, Nicholas Negroponte announced the One Laptop per Child initiative and the $100 laptop to much fan-fare at Davos in Switzerland. He captured the imaginations of world leaders with promises of ultra-affordable computing for school children around the world. He talked about changing the way children learn, improving their education and ultimately accelerating their access to the knowledge economy by deploying hundreds of millions of laptops.

That same year, Intel's nemesis, AMD, launched the 50x15 program with the goal of increasing internet access to 50% of the world's population by the year 2015. Unlike with Negroponte's announcement, AMD launched their program with an actual existing product, the Personal Internet Communicator (PIC).

These announcements put Intel, my employer at the time, on notice. The press from these two initiatives got under the skin of the the company's executives. The typical complaint was "We invest millions in emerging markets, and ship millions of low-cost PC's, but we we get no recognition from it." Intel's "thought leadership" effort was thus born. I was asked to pull a strategy and plan together to help Intel gain the perceived leadership position in bringing computing and internet access to under-served markets that currently don't have access.

We launched the World Ahead program in 2006 with the stated goal of giving one billion new users access to affordable, broadband computing. The three supporting pillars were accessibility (affordable computers), connectivity (broadband access), and education (training and digital content). These pillars were supported by the introduction of the unique computing platforms (e.g. the Classmate PC), broadband initiatives (Wimax deployments) and an expansion of Intel's Teach to the Future training program to an additional 8 million teachers emerging markets. The press we recieved from the launch was tremendous. Parallel speeches by Hector Ruiz of AMD and Steve Ballmer at the same event (the World Congress of IT) paled in comparison to Paul Otellini's speech about World Ahead. Later that year, Intel reorganized their emerging market sales for into an official "World Ahead" organization.

Then Microsoft jumped on the bandwagon with the launch of Unlimited Potential in mid-2007 with similar goals but an arguably more comprehensive initiative encompassing new of unique software solutions, marketing initiatives and sales programs.

The leaders lose their "luster"

As of this writing in March 2009, all of these programs still exist. OLPC, 50x15, World Ahead and Unlimited Potential are all still functioning. Some are struggling ... recent announcements by OLPC that their were cutting their staff by 50% and relying more on volunteers is just one example. Yet all of these organizations are still very active in the effort to increase computer access to under-served markets. On a trip this week to three countries in South America, both OLPC and the Classmate PC have been deployed, or are about to be deployed. Awareness and preference is very high for notebooks and netbooks. But none of these efforts could be called a stand-out "thought leader" today. A combination of time (hype can only last so long), previous challenges, and the capacity to continue to fund these projects all challenge their ability to lead. All of this is leading to what I believe will be a leadership void in the effort to bring affordable internet and computer access to emerging markets. But before I talk about this void and who could possibly fill it, I think it would help to explain what thought leadership is, and how a company can become one.

This post is the first part of a two-part series on thought leadership for computer makers in emerging markets. Part 2 will discuss the characteristics companies will need to develop if they want to become a "thought leader.

Pushing the "Go Button": Part 1

Fri, 20 Mar 2009 12:20:00 +0000

Authored by: Francisco Noguera

A little more than a year ago I made a decision and accepted an offer to come to Washington and work for a project -this website- I had long been fond of. Doing so has exceded my expectations in many ways. It has opened doors, sparked ideas and provided me with opportunities I'm deeply greatful for. The best part of this year has been and continues to be being able to meet wonderful entrepreneurs, obsessed with changing the world. Learning about how they intend to do so is the part I enjoy the most about my work.

Over the last two weeks I've been able to reconnect with some of those people I've met and I'd like to share some reflections about their work and, most importantly, about the decisions they have made to make their visions happen and become the change they want to see in the world. Today I'll write a few lines about one of them, my friend Rose Shuman, and over the weekend I hope to jot down some additional ones about others I've recently had the opportunity to spend time with and see in action, turning their visions into tangible change.

Interested in technology and its impact on society, Rose tried hard to get an interview with Google.org until she did, about two years ago. Sitting in her hotel room in Palo Alto the night before, she nervously prepared herself to hopefully impress the group in charge of evaluating her candidacy with a really smart idea. That's when she came up with the question of whether the Internet and information could be brought to those least able to access it the way you or I are doing right now. The next day she walked into the interview she articulated the still vague vision of a box through which illiterate people would be able to ask questions and listen to the answers, as long as they were available online.

Rose ultimately didn't get the job but the Google folks loved the idea and encouraged her to explore it further. She did and the pilot became a project that was later called Question Box. I've written about it before, and so has Boing Boing.

Continue reading this story...

Mobile Disruption

Wed, 11 Mar 2009 11:09:00 +0000

Authored by: Mark Beckford

I've always thought that the next major technology disruption would come from the developing world. This could partly be just a bias on my part (most of my career has been developing computer businesses in emerging markets). The underlying logic behind this belief is that disruptive innovations are cheaper, easier to use, and bring some type of end user value that doesn't exist in the current mainstream solution.

Emerging markets clearly require a more affordable solution. They also require something that is easy to use due to higher illiteracy rates and limited skills. Finally, in order for them to decide to use their hard-earned money on something, it has to be useful for them. Take a look at the PC. Even if someone gave PC's away for free, you still wouldn't see PC's sales go through the roof. Sure, there'd be a big bump, but not to the penetration level you see with TV's and other basic household appliances.

Even if a PC was made so easy to use (e.g. streamline and simplify the interface with large, logical icons) so someone that couldn't read or had no computer skills could use the PC easily, they likely wouldn't see that much value in it. The missing element is some unique value for consumers and micro-enterprises at the bottom of the pyramid. I don't think this value exists in PC's today.

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Guest Post: New Ventures Indonesia Launches IT Training Facility for SMEs

Fri, 06 Mar 2009 13:52:00 +0000

Authored by: Saurabh Lall

Information Technology (IT) has sped up the pace of globalization and transformed business practices world wide. In the past few years, the IFC, UNESCAP and UNDP have all cited the need for Small and Medium Enterprises (SMEs) in developing countries to adopt IT to create new business opportunities and remain competitive in the global environment. The appropriate use of IT can help SMEs cut costs by streamlining their internal processes, enable faster communication with their customers and help promote their products and services to a wider audience.

Despite the benefits that IT can provide, a UNESCAP report points out that most SMEs in developing countries of the Asia-Pacific region have been slow to adopt new technology. Entrepreneurs are often unfamiliar with computers and skeptical of the benefits IT can bring to their business operations. There is a general perception that IT can only benefit larger companies, and is not suited for SMEs. Even when entrepreneurs want to integrate IT into their businesses, they are often unsure of the most suitable and cost effective solutions for their business, and constrained by the limited IT literacy of their employees. Without appropriate training, SMEs in developing countries find it extremely difficult to incorporate IT into their core businesses.

Recognizing the lack of opportunities for IT education, New Ventures Indonesia has opened an IT training center for SMEs in Salatiga, Central Java. The center, which opened on February 11, 2009, was established as part of a grant from Hewlett-Packard. The facility is located in Satya Wacana University (UKSW) which will be responsible for managing the day-to-day operations of the center.

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Roundup: Catching Up on Our Base of the Pyramid Reading

Fri, 20 Feb 2009 14:55:00 +0000

Authored by: Francisco Noguera

My friend David, NextBillion reader and BOPreneur, pinged me last night and rightly asked why NextBillion.net has been slower than usual these days, missing a few of big news pieces that relate to the base of the pyramid and development through enterprise. He's right. The truth is Rob and I have been with our hair on fire testing and working on what will very soon be the new face of this website.

In fact, if everything goes according to plan, this will be the last post I publish in NextBillion as it looks and feels now! Anyhow, it's Friday and I do want to take the opportunity to point you to some relevant media pieces for you to catch up with this weekend, in case you haven't yet.

The first (hat tip, David) is a 14-page special report about the middle classes published in The Economist last week. Why is this relevant to our readers? Well, NextBillion.net is based on the premise that business, enterprise and the profit motive can serve the poor enhancing their dignity and choice so they can climb the ladder up to that level of the pyramid.

I have read it slowly, re-reading many paragraphs. It offers great elements of analysis and a great excuse to slow down for a second and reflect on the various and complex implications (economic, environmental, political and social) of the fact that more and more of the world's population are now part of the middle class. An indepth analysis of that report is in order and I've made a note to make sure that happens some time soon.

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iBoP Asia: Science and Technology Innovations for the Base of the Pyramid

Thu, 19 Feb 2009 22:24:00 +0000

Authored by: Jenara Nerenberg

iBoP Asia recently announced the winners of their first small grants competition and the second competition is coming up soon. I wanted to highlight the grants program for our readers at NextBillion, as I know that many of you have the ideas they are looking for.

A joint collaboration between the Ateneo School of Government (ASoG) in the Philippines and the International Development Research Centre (IDRC) in Canada, iBoP Asia seeks to advance the research agenda on science and technological innovations for the base of the pyramid in SouthEast Asia and does so through policy advocacy, conferences, small grants competitions, and more.

The winners from the first call for proposals can be found on iBoP's website and include Niti Bhan's Emerging Futures Lab, which, as a consultancy for BoP markets, will be looking at payment strategies and practices of the BoP with limited and irregular income. Several of the winners focus on improving farming practices, including the Sub-Plant Protection Department of Angiang Province in Vietnam and the Philippine Rice Research Institute, which focuses on building and sustaining the rice economy in the Philippines, through policy advocacy and providing farmers with greater access to technology.

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Notes From the Field: I have seen the future of healthcare

Fri, 06 Feb 2009 18:36:00 +0000

Authored by: Allen Hammond

Editor's note: Al Hammond, entrepreneur in residence at Ashoka, will write a series of reports documenting his experiences and the learning involved in started a "base of the pyramid" (BoP) healthcare venture to serve developing countries. This is his first report in the "Notes From the Field" series.

There I was, looking over the shoulder of a woman physician, in a unique 400+ seat medical call center in India, as she dealt with a female patient with abdominal pains. The patient was calling from her home on a mobile, had been initially engaged by a trained lay health worker, and then passed on to the doctor.

As the doctor asked questions--guided by a software tool called a clinical decision support system--and selected the patient’s answers, the questions on the doctor’s computer screen changed. Within a few minutes, the doctor had isolated the problem, decided that she didn’t need to dispatch an ambulance, selected a medicine, and clicked on another tab that sent an e-prescription by text message to the patient’s phone.

The patient can take that message on her mobile to a pharmacy and fill her prescription. The whole process took 3-4 minutes for the patient, and was free (subsidized by the state government). But it also didn’t cost the state much, because it only used a few minutes of the doctor’s time, so that she can deal with more than 100 patients in an 8-hour shift. No clinical office to rent or equip. No patient travel involved. Available when needed, 24-7. And trained lay health workers, paid perhaps a fifth of a doctor’s salary, handle 80% of the calls, so only 20% get passed on to doctors.

Thus, in economic terms, a single doctor is in effect overseeing the treatment of more than 500 patients per day. Of course, not all patients have problems treatable remotely—trauma, cancer, heart attacks and others will be referred to hospitals. But for many primary care problems, this is high quality, and very cost-effective, care.

It gets better. Another example concerns a young mother, calling late in the evening, distraught over her baby’s raging diarrhea. A lay health worker, guided by the smart software and short disease summaries, calmed the mother down and told her what to do. But, she asked, suppose it doesn’t work? All the clinics are closed now, and the hospital is hours away. So the health worker said, Why don’t you call us back every 2 hours—we’ll be here.

Imagine how wonderful that kind of help would be even here in the US. But this service is available exclusively to poor rural families in one state in India, for now. And it works—the call center handles 50,000 calls a day and is expanding to handle 3 times that number.

Truly, I felt I was looking at the future of healthcare. There aren’t enough doctors to provide traditional kinds of medical care in rural areas in virtually all developing countries. And there won’t be enough even in the US as the baby boom starts to age. So a more efficient model, based on de-skilling healthcare and using doctors very efficiently and only when their expert judgment is really needed, is inevitable. Maybe the Obama Administration should go take a look.

As for me, I’m convinced—I and my colleagues who are starting a health-based social enterprise in India are planning to partner with this call center in our pilot effort to transform rural healthcare. More about the struggle to finance that effort, in this market climate, in my next post.

3 Reasons Why Telcos Shouldn't Abandon the BoP Just Yet

Mon, 26 Jan 2009 13:37:00 +0000

Authored by: Rob Katz

Are there really enough profits to make telcos want to focus on the bottom of the pyramid? A new report, released last Monday by the technology market research firm BDA, suggests the answer is no.

Before we consider the case closed, let's take a closer look. After all, telecommunications companies have been some of the more successful firms when it comes to focusing on the base of the pyramid. Again and again, we read about big players like Vodafone, Motorola, Hutchinson-Essar, Bharti, MTN, Celtel, Telmex, etc. and their down-market profit strategies. Smaller domestic companies, like Smart and Globe in the Philippines or Grameen Telecom in Bangladesh, also owe much (if not all) of their growth to bottom of the pyramid strategies.

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