Articles by Eric Cantor

Written with David Lehr and John Paul

A while back, I posted my impressions of being a mobile consumer in East Africa, ranging from interactions with the woman who cleans my apartment to the varied uses of mobile telephony Acumen Fund sees among its portfolio companies. Things have evolved. Since then, my landlord fired her and the replacement cleaner, settling on a dynamic young woman named Juddy. She too communicates through mobiles, except in those instances where she runs out of prepaid phone credits and we resort to old-style human contact. My own account has been migrated to “postpaid,” meaning I receive a (outrageously high) bill at the end of the month instead of buying the prepaid credit that accounts for the majority of mobile usage here. Meanwhile, across the country, SMS short codes are becoming ubiquitous for radio show call-ins, university and government programs, health data collection and more, as mobile phones solidify their position as the connectivity platform of choice for the world’s majority.

Acumen Fund’s thinking on the potential for mobile phone applications in the developing world has moved forward as well. I finished the Nick Sullivan book — You Can Hear Me Now — that sketches out the birth of the Village Phone business in the late 90s. The original model allowed entrepreneurs in Bangladesh, primarily women, to buy $420 phones with microcredit loans and then pay them off over time with revenues from selling calls at a markup. To Sullivan, two keys to that model’s success were the smart foreign capital coming into the sector and the dynamic local talent willing to take entrepreneurial risk in order to make something happen. Today, as the cost of phones drops steadily, many are betting on value-added services on mobiles as the next boom. I have seen three aspiring business plans along such lines in the past month alone. Mobile applications are inherently scalable since they are automated, available over a wide area, and there is virtually zero cost to add customers. And a la Sullivan, enterprising service providers are going way beyond ringtones and games to test these enterprise applications in developing countries.

Our Business Technology Solutions Team is studying the ongoing innovations in the mobile application space, particularly in the social enterprise arena, to analyze potential benefits to Acumen Fund’s low-income target market and the businesses that serve it.

One of my toughest days working in this field was recently, when we went to the Mukuru slums to visit one of the sites operated by a business we are considering funding. I’ve been in some of the poorest places in the world - in places far afield as Peru, Pakistan, Honduras, India, South Africa, Brazil and beyond. But I don’t ever recall being as disheartened as during my visit here.

Perhaps my discomfort was brought about by the subject matter at hand. See, the business in question, along with a few others we are looking at, is trying to improve the conditions of sanitation facilities (read: bathrooms) available to the residents of these areas. We take our tiled, marble loos for granted in the West, thinking more about which fixture would go best with our new mirror.

But here, it’s a different story. Among the 300,000 - 500,000 (it fluctuates) residents of Mukuru, few if any have their own facilities. Imagine that, no place or privacy to perform bodily functions that everyone is obligated to deal with daily. This inevitably leads to very unpleasant and unsatisfactory conditions all around, a host of diseases and infections, and an unsafe river nearby. Related is the phenomenon of “flying toilets,” where waste is disposed of in plastic bags and hurled away from the house, a common practice after dark, when leaving one’s home in these parts can be quite dangerous.

I’m currently in Nairobi, Kenya, trying to accelerate our opening a new country operation and streamline our management support of new and existing investments, around technology and strategy. I received an interesting SMS the other day from Maggy, the woman who cleans my apartment and washes my clothes here. The message, asking me what time she should come, wasn’t as interesting as the fact that she sent it at all. Here’s someone living on probably less than $1,000 of annual income, and she’s well-versed in a technology that more than a few of my friends at home are not.

I’ve been thinking a lot lately about the mobile phone and its relevance to our work trying to improve services to the world’s billions of poor consumers. And relevance it has. Mobiles will be the PC for the people who don’ t have the resources or time to get computers and connect to the Net. Some 70-80% of Kenyans are still without mobile phones, but millions of subscribers are added each year as the price of handsets drops and coverage expands. Companies like Safaricom, the dominant provider here, dominate African stock markets and societies. The companies make a tremendous profit on their pre-paid airtime schemes, but at the same time give a critical service to many of Africa’s lowest-income residents.

Where on earth can you talk about wireless mesh networks over lunch in the Dalai Lama’s private courtyard while gazing out at snow-capped Himalayan peaks?

At the first annual AirJaldi Summit held last month in Dharamsala, India, of course. I had the privilege of attending this event along with one of our colleagues at Drishtee and interacting with a global group of technology professionals drawn by the opportunity to meet and discuss wireless networks and their relevance to local and international development.

What do Anil Kumar Taka, a Drishtee Kiosk Operator at the Jawahar Nagar village in the district of Meerut in Uttar Pradesh, India, and Stephen Holt, CEO of Movie Magic and an Iowa-based eBay entrepreneur, have in common?

Whether you call it the arrival of Business 2.0 or credit the technology revolution, it’s clear that cutting-edge companies the world over now provide platforms to empower their clients rather than delivering end-to-end solutions.  eBay provides an automated and efficient platform for product distribution, leaving it to their enterprising customers to decide what product mix to sell and how to price it.  Drishtee.com provides a turn-key package for offering residents of an Indian panchayat - a cluster of 5 villages - a mix of education, e-government, health, agriculture and leisure services delivered over a PC-based network.

Just off the plane from a two-week trip to South Asia, I am energized by what I saw in India: a quickly evolving business ecosystem poised to serve India’s 600,000 villages. India’s flourishing IT sector, epitomized by the massive traffic jams and lack of hotel rooms, has been widely hyped, but perhaps even more apparent on this journey was the growing base of practitioners, development folks, NGOs, government agencies and - yes - businesses that view India’s rural population - much of which earns less than $4 a day - as true consumers who want to make their own choices and solve their own problems. This should not be surprising, considering 1 in 8 people on the planet lives in an Indian village, but it really hit home being on the ground and seeing how much energy is going into identifying and deploying solutions.

This ecosystem is made up of actors from a wide spectrum, who approach poor markets from a different perspective. Drishtee - an Acumen investment whose ambitious growth plans will soon connect India villages through the deployment of service-rich kiosks - is making significant impact with its innovative model, and we are committed to helping them realize that vision.

There seems to be growing excitement about Acumen Fund’s model, as evidenced by our recently announced Fellows Program, which has attracted applicants from all over the world, from New York to Uzbekistan.

This interest has also been made clear on our visits to universities. I recently participated in a Business Sustainability Conference at Dartmouth’s Tuck Business School. The prop plane to Manchester and the drive through snowfall were made worthwhile by the enthusiasm of the students, who peppered me with great questions.

The conference’s intent was to “discuss the important role that business leaders can play in creating a more sustainable world.” People are increasingly buying into the idea of the positive social change that the private sector is uniquely positioned to catalyze. The morning keynote was delivered by Andy Ruben of Walmart’s strategy department, who was quite convincing in his quick survey of the waste, fossil fuel burning and expense that the retail behemoth can cut from the world by making as small a change as reducing packaging of one toy by a mere 3 inches.

We recently closed the application process for the Acumen Fund Fellows Program, and our initial count shows more than 600 applicants to the program, far exceeding expectations. A preliminary analysis (of about half the applicants) lifted some interesting statistics about the diversity and range of applications:

* More than 52 countries are represented in the applications we’ve received.
* The leading nations are: United States, with 28% of the applicants, India with 14%, United Kingdom with 14% and Pakistan with 10.5%.
* All continents are represented, and countries are wide-ranging, including Gambia, Philippines, Moldova, Argentina, Costa Rica, Congo and the Czech Republic.
* Of the U.S. applicants, while New York represents the largest share (30%), representation is wide, with Kentucky, Arizona and Georgia all making a showing.

Needless to say, this will be a very competitive process, and we will have to make a lot of hard decisions to narrow our field down to a final cohort of 10 fellows. (We will keep you posted on the process.) But overall, the numbers are a testament to the extreme interest in this kind of work and to the promise of these smart, inspired individuals.