Friday, April 16, 2010

Computod@s closes the books on Q1

I apologize for the leave of absence from SocialCapitalista this being my first post since the New Year. In my excuse, the business has taken off since returning from Christmas leaving me with a schedule eclipsing the standard 9-5 job, and a mind that has been fried deeper then Kentucky Fried Chicken rendering it incapable to entertain and update each of you as frequently as I would like. However, as we have just closed the books on the First Quarter of Computod@s, I felt that I would be able to summon the creative juices to provide you with a quick overview of the past three months.

Being home over Christmas was a restful, delicious, and much needed trip. It was kind of like a vacation back to childhood; Mom preparing whatever I put my finger on in the pantry, friends coming over to play video games, watch television, and even a few trips to the local casino. I chose the word carefully when I said “vacation” to my childhood. When I was a teenager a vacation meant traveling to Hawaii, playing golf in Palm Springs, or Disneyland of course! But now that I have really been able to settle into the “realistic” lifestyle that roughly 70% of people in this world live, the only vacation I need is: the choice of what food I eat at night, every electronic device at my fingertips, the safety to walk to my friends house.

From that feeling of not being able to walk safely throughout San Salvador, my business partner Sam and I knew that it was time to find an alternative means of transportation. Sam’s parents were so generous to donate a van that they had idled in their garage. Just after New Years, the Computod@s team migrated from the Pacific Northwest through Mexico, Guatemala, and finally reaching El Salvador one week later. You may be able to gain perspective on the safety here in San Salvador as I tell you that we felt it to be a good decision to drive a minivan (with 100k miles) thousands of miles crossing through cities like Juarez, and the capitals of Mexico and Guatemala just so we will not have to take the bus to work here in San Salvador. My good buddy Josh To (Founder of non-profit BRUTE Labs a key supporter of Computod@s) and his brother Justin To met us in El Paso, TX to tag along on this wild journey. We were happy to have them along for the trip, however, it was understood that this was not a trip for tourism, but rather strictly business as Sam and I needed to return for our much awaited shipment of 200 computers arriving any week. (Pic of the crew after arriving in El Salvador)

After arriving in El Salvador, Josh and Justin shadowed Sam and I for the next week providing key feedback and strong creative ideas for the presentation of our computers. We knew that we were going to be providing people with what would be their first computer and we wanted the experience and quality to match the feeling. With that, Josh has jumped on board as our creative director helping us to revamp our logo and branding giving Computod@s the marketing strength to take refurbished Dell and HP computers and turn them into Brand New Computod@s computers.

Josh has also helped with our box designs (see pic below), which we are very proud of as something to not only protect the box, but also to help market Computod@s, considering that trash in El Salvador doesn’t end up in the waste like in the U.S., it gets reused somewhere, hence…great marketing! For example, the bedside table in my room is an box. Justin was able to make us small vinyl stickers (see pic below) of our logo to go on the lower corner of the computer next to the Microsoft Windows and Pentium Intel stickers. (Pic of Justin's vinyl sticker of the Computod@s logo created by Josh)

In general, marketing in El Salvador takes a new name from what I studied in business school. Comparably, I see marketing and advertising in the United States being subtle, respectful, or even subliminal, but El Salvador is more “in-your-face,” “buy this product now” type advertising. Through the city you will find that a billboard will be waiting at every turn. Being a major form of advertisement, the rate at which new billboards are hoisted within the city makes me feel like I am in a Swing State just one month before a Presidential election. (Pic of a client holding her new computer in our stylish boxes designed by Josh)

As marketing is important, I have found that the “word-of-mouth” to be a self-fulfilling, everlasting engine that has taught us that if you are selling a quality product that people want and need, it will sell itself. In another marketing comparison that I have been able to deduce; the U.S. is what I call “first and only,” while El Salvador is “first and viral”. It is really looking into what makes you popular amongst your friends. To break it down, “first and only” comes from the idea that Americans like to be the first and only person to own a new product. Its value comes in the fact that it is rare. You want to tell your friend about your new watch, pair of shoes, or Tesla automobile, or iWhatever, but if your friend went out and bought it, you wouldn’t be as “cool.” In El Salvador I have found it to be the contrary in that buying the product first while being able to share the great deal or product with your friends is something that makes Salvadoran consumers unique and of course, “cool.” Not to say that all Salvadorans are wearing the same watches and shoes, but that the word of mouth can have an unexpected affect on your inventory and forecasts.

That lesson on Salvadoran Marketing was necessary to offer a perspective and reason as to why at Computod@s we are in a difficult situation today. Difficult, however, does not always mean bad. After arriving in our warehouse at the beginning of March, we were able to sell all 200 computers in the entire month of April, half due to word of mouth, and half due to contacts. Our network and contacts is to what we owe most of our early success. It might send the auditors for a whirl, but our contacts deserve a line on our balance sheet under Assets. They offer key qualitative support, which has directly translated into strong quantitative results. Knowing people means the difference between success and failure in El Salvador. I know that it goes a long way in the U.S., too, but it is a whole new ballgame here. Each meeting we have will lead us to 10 new organizations or figureheads. Earning a spot inside this informal network has lead to our speedy success, and to this difficult situation I mentioned. A situation of selling these 200 so fast that “word-of-mouth” is drowning our inventory! As I said, difficult is not always bad. Last week we ordered our second shipment of 200 computers from Interconnection USA, which will arrive at the beginning of next month. The only change in this order was that we told Interconnection to start preparing the third shipment because after adding a “word-of-mouth” multiplier in our forecasts, we will need a strong, consistent level of inventory. (Pic of the South end of our warehouse. We test every computer before packaging to make sure that is leaves our warehouse in great coniditon)

We are beginning to truly define our market and understand our customers. We are a few shipments away from reaching sustainability and we already see this business having a long lasting future impact. I can’t even imagine what kind of volume we will see when we decide to move beyond “word-of-mouth” marketing. A customer walked in our warehouse today asking to purchase a computer. When I told him the price he practically jumped out of his shoes. He said that he knows many of his friends that would love to purchase one, too. I was devastated to walk him into our warehouse showing him that we are currently out of stock. He asked if we would be here permanently. With the way we sold our first shipment and his reaction after learning of our never before seen price for quality computers, a reaction that I see everyday…I told him that I don’t think Computod@s will be going anywhere soon.

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Monday, March 8, 2010

Guatemalan Graduation

Tonight fear dominated the emotions of my house. It was 8:30 pm and we got word from another American house that one of our friends, Laura, had not gotten home from work. In El Salvador, when it feels a little unsafe, it usually is. We informed the police and began to rally the housemates to begin a search party. It is difficult to live in a country that when someone is late coming home from work, it usually means something bad happened. Just as we were walking out the door to jump in the pick-up truck we received a call from the other house informing us “she is okay, she just got robbed.” We were all relieved and began to joke that we thought something bad had happened to her. After settling back into my hammock with the book The Great Gatsby—a teacher once told me that everyone should read Gatsby twice, and that it makes so much more sense when you are older—I began to think about our reaction to the incident. Using phrases like “she is okay,” and “just” with the word robbed is a little unorthodox in most societies. But here in El Salvador we comment by saying, “OMG…we got all worried, and she was JUST robbed.”

Having now lived in both rural communities and an urban setting I enjoy the rural lifestyle as I have found it much safer and more family oriented. I look for opportunities to visit my host family in San Pedro the rural village I lived in while creating the micro-credit program for Mercado Global. Recently an opportunity presented itself when Chema, the oldest sibling of the family asked if I would be present at his high school graduation. You may remember reading from a recent post that Chema’s father died a month ago in a tragic bus accident. Chema explained to me that in Guatemala it is tradition that the parents “receive” the student on stage as he is presented with his diploma. Chema was to be the only student out of 24 graduating seniors that would not have both his parents present. He said that it would be an honor if I would take the place of his father and “receive” him with his mother on stage. I told him that I consider it an honor to be asked. It was a great time to get away from the madness of San Salvador and support my host family as two of the younger siblings were celebrating birthdays in that same week.

After twelve hours on a bus I can spot the lake. At this point in my trip the lake serves as a bolt of motivation that I am minutes away from San Pedro, one of the most pristine places I have every been on earth. However, as my bus began to descend upon San Pedro I noticed a difference in the lake. Its usual blue color was casting a green tint like a sheet of lily pads; however, I had not known frogs to be so apparent around this lake before. In fact, the lake was experiencing an Algae Bloom. A bloom to this degree had never been seen before among these indigenous Guatemalans. Hundreds by the day were traveling to the shores to clean the lake, bucket by bucket. At first I wondered why all these Guatemalan’s did not have to be at work. As I began talking to the people I realized how important the lake is to the economy. Fish had provided many jobs to the natives, and was a traditional food for all three meals consumed during the day. The bloom had also struck tourism. With a dirty lake, many hotels including the broader industries are at peril of survival.

And they are trying to clean in bucket by bucket! Although I am no biology major, I made a quick trip to the Internet cafĂ© and tried to relay information to the people about the real problem that has been growing at the bottom of the lake for years and years. I told them that it is the chemicals from which they wash their clothes and bath in the lake, the fertilizers that they use on their crops and allow to be washed into the lake, and the trash for which their waste management system is only to wait for the rain to wash it down into the lake. These problems have magnified as an affect of the native lifestyle, and now the bottom of the lake is beginning to roar. I try to explain that a real change of lifestyle is necessary to combat this problem, but how do you get across to a population whose answer to every problem is that “it is in God’s hands.”

As an affect of the lake the natives looked saddened, hungry, and the town carried an obsurd odor among everything else. However, there was a line in the cloud as Chema was graduating, and I was excited to be there for him on this important day. It was a very emotional experience. His Dad was a major influence on him continuing his education, and it was very difficult not having him there. In Guatemala, 50% of children drop out of school before sixth grade! This was a big accomplishment, and it was difficult for Chema to celebrate it without his hero. It was a beautiful ceremony held in the town convention hall, which is about the size of a movie theatre. Traditional Guatemalan graduation music was blowing from the speakers as the students received their diplomas. About half way through the list the power went out! We stood in the dark for about two minutes before it started up again. It forced me to contrast my high school graduation experience. I graduated from a prominent public high school in Washington State, and my graduation was conducted in Seahawk Stadium. My brother, who graduated three years before me, graduated at Safeco Field where the Mariners play baseball. Standing with the power out I could not help but wonder if the power has ever gone out at Seahawk Stadium. I was very proud of Chema, and honored to “receive” him with his diploma. Proud, and perhaps a tad bit out of place, as I was the only foreigner in attendance.

A graduation and two birthdays complete, and more cake and coffee then my body could handle. It was time to return to El Salvador as Computod@s is just beginning to ramp up. I have been very busy in the warehouse/office lately…GOOD BUSY. In my next post I will be sure to update you on the recent progress of Computod@s and where we are headed with the business. Saludos!

Tuesday, February 2, 2010

H2O, Computers, and Spiders OH MY!

Computod@s, the business I created to provide low-cost, high-quality computers to low-income communities in El Salvador, has taken great strides recently. It is amazing how many people will “go to battle for you” when you are creating something for the betterment of society. We have received support from key individuals and institutions from both the U.S. and in El Salvador making my job less demanding and freeing up more time to take on new projects.

This past March I came down to El Salvador for my first time with a delegation from the Santa Clara business school. Part of the immersion was focused on visiting micro-entrepreneurs in order to better understand the importance of micro-loans. At first I was hesitant to believe that in the rural villages lived such a kind of motivated, creative, and entrepreneurial persons. After meeting Angel Tobar from Santa Maria de la Esperanza, a small village just outside the capital San Salvador, I knew that the class did exist, and all that was needed was financial assistance.

At only 18 years old, Angel discovered a method to utilize the rainfall much more efficiently for the town with the creation of a hydraulic ram pump. The pump uses the power of flowing water to pump a smaller quantity of water at much higher pressure. Ram pumps (see Angel introducing the pump in photo above) require no fuel or electricity, they quite literally run on water! The pump in Santa Maria de la Esperanza cost only $52 and is a unique apparatus in that many of the parts are from recycled materials and other common products used in these rural villages. For example, the body of the pump was created from an empty fire extinguisher. Angel has been able to use this pump to create many crop fields (photo below depicts one crop field. Vegetables are grown above the ground on a fence like apparatus and beans are grown below to best utilize the water source) that feed the whole town, and not to mention all the water they could ever need. Shelby McIntyre, professor and co-chair of the marketing department at Santa Clara University showed a lot of interest after he found out what Angel had created. I have been working directly with Shelby, who is helping to secure funding from organizations in the States, and Angel to create a franchise model from this ram-pump. We are currently in the process of creating a manual of the ram pump and are looking to begin creation in a new community in early 2010. I will be sure to update all of you about the progress of this project.

There is no doubt that economic development is a very large sector with an enormous budget, so the only answer to explain why the poor remain poor is to “follow the money.” It is now time to start channeling these funds to people like Angel who have the passion and creativity to create a positive change.

If you remember when I was creating the micro-credit program in Guatemala one of the greatest hurdles was communicating with the many indigenous languages spoke in the rural villages I was visiting. Lucky for my Spanish, that which is the only language spoken in El Salvador. As my Spanish has improved immensely, I now look for opportunities to help with translation when delegations or other institutions visit from the United States. The opportunity presented itself last week as a group of prominent poets from the state of Indiana came to learn and study with poets of a different culture.

I met the poets in Quetzaltepeque, an hour bus ride outside San Salvador, which is the home of the Salvadoran poet organization. It was an amazing day as I became very close to the Salvadoran poets who were in there lower 20’s just like me. The day was dedicated to the arts. First we visited a pottery cooperative. As you can see from the video below these men are very skilled artisans in pottery. We were able to see, as you can, too, from this video how a pot is made from clay to finished product. These pots resemble many pots that I have seen on the mantles in the houses of my friends in the States. However, these pots were sold for only $2 to the natives who use them as a pail to transport water, and to cook soup.

For the second part of the day we created murals on the village walls with poems inscribed over the paintings. My artistic creativity doesn’t fall far from the business tree, so I mostly stuck to translating. The poets were accompanied by a news reporter who was creating a documentary for one of the television stations in Indiana. As I was not occupied with a paintbrush, he approached me curious to find out more about my mission here in Central America. As I began to explain to him some of the projects I am creating with some of the experiences I have had he immediately asked if he could interview me for the news station. I said that I would be delighted to and that we would conduct the interview that night after we were done with the murals. Just as things couldn’t have gotten any better, they got worse! I began talking to one of my new Salvadoran friends and asked him what he does when he is not with this organization. He told me that he ferments and sells liquor. I found this to be very intriguing as he described the process of creating this alcohol using the corn from his fields. He asked if I wanted to try some, and as a curious college graduate, I bit the line. He gave me one large shot of this alcohol and waited to tell me after I drank it that it flirts close to 100% alcohol. I am pretty sure that my mind was still thinking college, but my body forgot to tell my mind that for the past four months I have been living in a city where I am not been able to leave my house at night; therefore, after one more shot I was drunk. After I returned to the murals the reporter had his camera and microphone all ready to go. You can just imagine how this interview went. Don’t worry if you do not have access to the Indiana news stations, because I am sure this will be on YouTube in no time. (Below is picture of me in my office surrounded by Computod@s computers)

Two weeks ago the CEO of DPG, a supporting partner of Computod@s invited my business partner Sam Baker and me to his beach house on the coast of El Salvador. The night before Sam and I traveled to Santa Maria de la Esperanza to meet with Angel about the ram pump. We ended up staying longer then expected, and due to the length of time necessary to get back to the capital as well as issues of safely traveling at night we had to spend the night in the village. We had a great night just enjoying the company of the people in the village. We sang songs because there were no devices to play music, and I think I was able to take care of my arachnophobia as when I turned off the light and the last thing I saw in my bedroom was a spider the size of my palm. In order to make our business trip on time, we woke up at 5:00am and had to walk 1-½ hours through the forest to reach the freeway. Four buses later and we were back in the capital with 15 minutes to spare before it was time to head off to the beach.

Walking into this house on the ocean, my eyes saw a sight that I never thought existed in this country. A three-story house that was a pebbles throw from the ocean with a swimming pool accompanied by a hot tub with a table constructed in the middle to serve drinks. As this day was supposed to be relaxing it is very difficult in these extreme environments. As we left the gates of this beach house it was not more then two minutes into the drive when looking out the window you could see shack after shack. This is one of the greatest struggles in El Salvador, which has the seventh greatest inequality wealth gap in the world, and even worse is how visible. It was difficult to enjoy a drink with my boss in a hot tub that is a pebbles’ throw from the ocean, knowing that if I throw that pebble in the other direction it would land on a community struggling to keep the water flowing. What a day: eating breakfast in one of the poorest villages in the world, and eating dinner in one of the richest. That is doing business in the developing world!