Talk about entrepreneurs and everyone starts to think of money, mansions and flashy cars. After all, that is what a successful entrepreneur has, is it not? The truth is, not all entrepreneurs live this way. In fact, some of the most innovative and resourceful entrepreneurs reside in the poorest places on earth.
These entrepreneurs in poor countries are driven to provide a livelihood for their families and communities. With little resources, they are able to create their own version of success. In turn, they are slowing bridging the gap between poor and rich. Not only that, but they are also making a lasting impact. This is in contrast to charitable activities which help people in impoverished areas but fail to motivate them to make a change and aim for a better life. As much as charities have their part to play, fostering this entrepreneurship in poor areas can drastically improve developing communities. This book summary will tell you why.
In this summary readers will discover:
- How microlending helps in the fight against poverty
- Why resourceful leaders are key
- Clear missions
- Honesty and teamwork
- Sustainable success
- Taking risks means new opportunities
Key lesson one: How microlending helps in the fight against poverty
Given the level of poverty worldwide, we are often left wondering what we could do to help. Money seems to be the obvious answer. Donate to various charities, maybe even spread the word and raise awareness so that others could help as well. But is this the only approach?
Poverty is a large problem and there is no silver bullet that is going to make it disappear but instead of donating money to a general cause, what if we had to focus on individuals instead?
By supporting individuals, there is potential to uplift their entire family and quite possibly the entire community. This seems like a more sustainable option does it not? The best part is that to achieve this, the money required is actually quite low. Microloans are the key to this approach.
Microlending was first introduced by Dr Muhammad Yunus and Grameen Bank in India. They provided small, new businesses small loans with low interest rates. This helped many village entrepreneurs start their business with phenomenal results. In fact, it made such an impact that Grameen Bank was awarded the Nobel Peace Prize! It launched microfinancing into the world, with even the author starting one because of its benefits. Jackley witnessed poverty in Africa firsthand and was determined to help. Her company, Kiva, connects lenders in developed countries to entrepreneurs in developing ones. In this way, entrepreneurs receive financial support from sponsors around the world. Sponsors are kept up to date with the progress of the business and entrepreneurs pay them back in manageable instalments. The difference that Kiva makes in communities is huge. Not only are successful entrepreneurs made but they, in turn, inspire their communities and help break the cycle of poverty.
Key lesson two: Why resourceful leaders are key
In order to be successful, entrepreneurs must be resourceful. This is regardless of where you are from and what you have at your disposal. A great example given in the book is that of Patrick from Uganda. Patrick lost his family to a rebel attack and had no money or any form of education to his name. This did not stop Patrick from achieving the incredible. He started digging for clay to make bricks. He started out crudely, with little to no equipment but still managed to sell his bricks to builders. The longer he made bricks, the more he refined his methods. This ensured that he bettered his product and his income. Patrick worked hard for years but he was able to create a business for himself, employed others in his community and provided much-needed supplies. He was able to carve out success using his bare hands and the ground beneath his feet.
The lesson here is that a lack of resources should never hold you back from starting your business. If you keep waiting for the perfect moment to begin, it will never happen.
Key lesson three: Clear missions
When you start a business, you need to have a clear vision of what you want your business to be. You develop your business with this vision in mind and even though your path may change, the end goal remains the same. This is your mission and you need to ensure that you keep it in mind at all times.
Jackley understands the importance of a clear mission. When she first came up with Kiva, she was approached by two other entrepreneurs with a similar idea. They initially joined forces as they were ambitious and had good connections. However, once they started to work together, Jackley figured out it would not work out. They kept treating her as an inferior and kept moving further and further away from the original mission. Kiva eventually broke off the partnership to stick to their mission. Kiva successfully stuck to the mission to connect entrepreneurs with the sponsors they needed distributing more than $600 million microloans around the world. The other two entrepreneurs also launched their company, but it never lived up to Kiva to the lack of a clear mission.
Key lesson four: Honesty and teamwork
We are all familiar with social media and the endless happy photos and success stories being posted online. But what about the failures? Why does everyone feel the need to hide behind the exaggerated accomplishments and happy moments? Nothing in life is perfect and we can’t expect to keep up those pretences. People will see through it and will lose their trust in you.
Honesty and transparency are, therefore, crucial to attract loyal and committed customers. Kiva achieves this by allowing entrepreneurs and sponsors to communicate directly. This is what sets them apart from charities. Sponsors receive regular updates on the businesses they have supported and progress can be tracked.
Honesty and transparency can also help out in tough situations. When Kiva found out that a partner organization embezzled over $100 000 in loans, they were heartbroken, to say the least. They had no clue how to handle the situation. In the end, Kiva chose to be completely transparent with sponsors, admitting their mistake of being too trusting. Thankfully, sponsors appreciated their honesty and apology and continued to support the organisation.
So not only does honesty and transparency allow people to see how well the business is doing, but it also allows supporters to understand any failures which may occur. This fosters an environment of trust and gives supporters a reason to recommend your business to others.
This is also true for your team. Starting a business is never an easy task and the people you surround yourself with are important. Having a great team that is honest and transparent with each other is also important. Teamwork and collaboration will allow you to overcome many an obstacle, so be sure to embrace your team!
The example given in the book is that of candy store owner, Clay. Clay had a great business going in Hawaii but even though he had loyal customers, he sometimes struggled to make ends meet. His nephew Bronson, a business student, offered to team up with him to give the store a makeover. They raised $50 000 on ProFunder, the crowdfunding platform. The money came in from family, friends and loyal supporters of the store. Clay rewarded sponsors with exclusive tastings and personalized candy. The resulting makeover of the store was a success and helped bring Clay’s store new life and newfound success. This team worked together to make dreams come true.
Key lesson five: Sustainable success
If you want your business to have sustainable success, you have to prepare yourself for years of trial and error. No one will get their product or service right the first time. Even Apple is constantly improving its iPhones and that is what makes them successful. They continue to innovate and refine their product over the years.
Trial and error will allow you to refine your product or service to the best possible version. The key to remember though is to not stop innovating. Your expertise will grow, your business will expand and yet you must continue to refine and innovate to achieve sustainable success.
Key lesson six: Taking risks means new opportunities
We are all cautious by nature – taught to avoid dangerous situations in order to survive. However, we have to move past this if you want to be a successful entrepreneur. Why? Because taking risks is integral to exploring new opportunities for your business. Starting a business is itself a risky decision and many people have business ideas but not the courage needed to take a leap of faith.
Katherine, a student from Uganda, learned basic business techniques and was ready to start her business. She had already done her research and decided that selling fish would be the perfect business opportunity as demand was high. So she purchased fish from a local supplier and tried her business idea out. Katherine hit a bit of a barrier as her profits were limited. This happened as she paid a high price for the fish to begin with. To rectify this snag, she knew she had to forego the supplier and head straight to the source. This entailed a risky and expensive bus trip to the lake. Using her sponsorship money, she paid for the bus trip and took the risk to travel to the lake. She ended up paying less for the fish at the source and maximized her profits on her return. This new strategy allowed her business to grow successfully. Her courage to take the risk paid off.
Taking risks in the early stages of your business ca really work. They will also allow you to be more open to risk at later stages as your business grows and evolves. There really is truth in the old saying ‘nothing ventured, ‘nothing gained,’.
The key takeaway from Clay Water Brick is:
Microlending is a powerful tool to empower aspiring entrepreneurs to make a difference in impoverished communities. Even with little resources, entrepreneurs can achieve their goals by being resourceful. Keeping a clear mission in mind is key to keeping yourself on track and avoiding being distracted. You have to move forward with determination, transparency and integrity if you want to be truly successful. Your success will be the inspiration other budding entrepreneurs need to propel them to take the leap.
How can I implement the lessons learned in Clay Water Brick:
Do not be risk-averse. Be brave and take risks in the early stages of your business. There will be failures, but without trial and error, you will not achieve sustainable success. You also have to be honest and transparent with your partners about any failures that occur. They will appreciate your honesty and continue to support you through this refinement process.
