Entrepeneurs (August 20, 2010)

Entrepreneurship

“So what did you do on Utila, famous for its scuba diving, whale sharks and deserted Cay Islands which you can only get to by chartering a boat from a fisherman?”
“Well, I hung out at Will’s Tacos a lot. And tried to open a business selling some alcohol.”
Soon after I got to Utila I made friends with a Honduran named Spencer on the beach. Spencer is from Tegulciapa, a large city in the south of Honduras, but has Irish family that lives in America (Spencer is not a Honduran name). Through a variety of unfortunate circumstances he ended up stuck on Utila with no money and no way to get home. He’s been living in a tent behind his friend Will’s house, the same Will who owns the taco shop that he works at with a couple other friends.
After hanging out on the beach a few times with Spencer I told him I would give him a little money if he was willing to teach me some Spanish vocabulary and pronunciation, and he quickly agreed. At some point in our “Spanish lessons” (its really mainly been hanging out at the beach and making him say everything he says in both English and Spanish) he shared a drink he had brewed that was a mixture of coffee, whiskey, cream, chocolate, cinnamon, and some other secret ingredients.
The drink was absolutely delicious and Spencer kept talking about selling it for money on the island. Tonight Will’s Taco stand is having a party with a bunch of people coming by, and I agreed to lend Spencer a little money for the ingredients we would need to brew a few bottles of the drink. He took me to an out of the way market that sold things for about half of what they did at the touristy supermarket on the beach and we bought enough supplies to make 60 or 70 servings of the drinks for about 15 USD.
Our plan is to give a first drink away free with a purchase at Will’s Taco, and then charge for more drinks. Usually tourists on Utila pay about 25 limperas for a drink, which is a little over a dollar. Theoretically, if we can even sell 15 drinks we’ll recoup our money. If we can sell 40, Spencer can make enough money to keep a little, repay me, and buy ingredients to make another batch.
Its amazing to me what kind of opportunities there are for entrepreneurship here, and how easy it is to start your own business. Imagine a young person who wanted to sell drinks in United States and tried to just set up somewhere and sell for a profit. You’d need to get a permit, fill out piles and piles of paperwork, and pay rent. After doing all of that, you probably wouldn’t really end up selling anything anyway since a giant corporation could sell the same product cheaper. Parks are supposed to be public space, but you can’t even just set up and start selling something in American parks, whereas here you can create a business in a day and start selling something anywhere.
Obviously I’m not saying that selling liquor for a living is the ideal childhood, but there’s definitely merits to living in a place where so many more people can be their own boss and make their own business decisions. Young Americans work at Dunkin Donuts and WalMart and learn how to kiss their boss’s ass and turn off their brains for the time they are on the clock, and they learn not to care about their jobs because it makes no difference whatsoever to them how many coffees Dunkin Donuts sells in a day. Obviously everyone can’t be their own boss, but it seems like a lot more young Hondurans have the chance to learn how to create a self sustaining business, and work somewhere where they’re actually invested in the outcome of what they’re doing.
It’s also pretty amazing how big of a difference a little bit of money can make for people in places like this. If Spencer’s business ends up being successful, a $15 loan literally could have changed his whole life, and gave him the chance to be self sufficient. Even though there’s times he doesn’t even get to eat, Spencer has never asked me for anything for free, and its clear that the money I gave him is a loan towards starting his own business. Lots of people in poor countries really just want a chance to make it, and its hard for us to imagine but for a lot of people a small loan could be almost impossible to obtain in their communities.
With the Internet, you don’t even have to leave your house to make this kind of difference in someone’s life. I don’t know how many of you know about Kiva, but Kiva is a website that loans money to entrepeneurs, primarily women, in developing countries who have an idea to make money but need capital to start.
Entrepreneurs on Kiva propose their business ideas to a local micro-finance organization (micro-finance is the concept of loaning money as a type of charity rather than for profit) and they explain how their business will make money. Then people in the US and Europe lend money to the entrepreneurs so they can start their business. Eventually the loan gets repaid, and the donor can either take their money back or give it to a different entrepreneur. An incredible 98.84% of the loans made on Kiva get repaid, which is really hard to imagine when you think about the world we live in. Goldman Sachs has billions and billions of dollars and access to all the best ways to make money in the world, and they need billions of dollars from the US government to survive. On the other hand, people so poor that a tiny loan can change their whole life manage to always pay their creditors back. Imagine if the US government had given all those billions of TARP dollars to developing world entrepreneurs rather than the greedy morons at Goldman and AIG. I feel like the world would have been alright if we let those banks collapse but gave millions of people the opportunity to start their own businesses…most developing world entrepreneurs don’t use their loans on private jets!
Anyway, before this turns into too much of a rant I’ll wrap it up. Everyone really should let someone borrow money through Kiva.org , its a FREE way to give people the power to change their own lives.