should helena support the idea of opening an affiliate in miami?why or why not?
HBR.ORG MAY 2015 REPRINT R1505X HBR CASE STUDY Stretch the Mission? A nonprofit that supports emerging-market entrepreneurs considers expanding to the U.S. by William A. Sahlman and Ramana Nanda Do N ot C op y or P os t This document is authorized for educator review use only by SAIF ULLAH KHAN, HE OTHER until Feb 2022. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860 http://hbr.org http://hbr.org/search/R1505X William A. Sahlman is the Dimitri V. D’Arbeloff– MBA Class of 1955 Professor of Business Administration, and Ramana Nanda is an associate professor of business administration, at Harvard Business School. Case Study Stretch the Mission? A nonprofit that supports emerging-market entrepreneurs considers expanding to the U.S. by William A. Sahlman and Ramana Nanda M AJ A M O DÉ N A Bold Idea Unamano had been a pretty big idea for a shy, studious girl whose Colombian family still lived within sight of Miami International Airport. After gradu- ating first in her high school class, Helena had gone north to college, where she studied, among other things, new-business funding in Latin America. She was disturbed by what she learned: It was easy enough for an aspiring entrepreneur to get a $100 microloan, but borrowing sizable amounts was impossible—as was obtaining any kind of venture capital—unless you were rich and from a prominent family. Helena had dreamed of start- ing a nonprofit that would seek out, mentor, and support high-potential entrepreneurs in Latin America. But it wasn’t until her first year of law school that she’d found someone to help her: her classmate Conrad. They’d bonded over their Miami roots and their desire to make a difference in the world, and soon they began developing Helena’s idea into a full-fledged organization. Unamano’s purpose wouldn’t be to raise cash and spread it around. Instead, it would serve as a connec- tor, recruiting local business leaders to commit to helping entrepreneurs. Because the defining vision had been Helena’s, she became the CEO. Conrad was juggling too many other pursuits to take an executive position at the time, but he agreed to help her and serve on the board, and his ideas, energy, and fearlessness contrib- uted to the organization’s success in attracting dedicated people and money. He’d been the one to suggest that Unamano aim to quadruple the revenues of the small businesses it To Helena Valencia, Miami was home. She had grown up there. It was the place that had shaped her understanding of people and launched her into the wider world. In fact, her love of the city’s mingled cultures and vibrant local businesses was one of the things that had inspired her to cofound Unamano, now a world-renowned nonprofit supporting entrepreneurship in emerging markets. But Miami was not, in Helena’s mind, a logical place for Unamano to expand next—a move that Conrad Abbey, her cofounder and close friend, had just proposed. He was adamant that the city—his hometown too—met their main criteria for a target market: high and rising un- employment, widening income inequality, and an inhospitable environment for would-be entrepre- neurs. Miami needed Unamano’s help just as much as Medellín or Amman did, he had argued at a board meeting a few days ago. Thinking of her own cousin Guillermo Pombo, an engineer who had recently graduated from the University of Miami and was struggling to start his own business, Helena could see where Conrad was coming from. And yet her instinct was to oppose the idea. Unamano’s mission was to help entrepreneurs in emerging markets—not in the United States. An American city, no matter how disadvantaged, could fend for itself, right? Conrad’s proposal had divided the board down the middle, with half the members favoring it and the other half crying foul. Out of respect for her friend, Helena had held her tongue at the meeting. But she’d been thinking about it ever since. Was he way off base on this one? Or could Unamano’s geographic scope be expanded? COPYRIGHT © 2015 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. May 2015 Harvard Business Review 2 EXPERIENCE FOR ARTICLE REPRINTS CALL 800-988-0886 OR 617-783-7500, OR VISIT HBR.ORG Do N ot C op y or P os t This document is authorized for educator review use only by SAIF ULLAH KHAN, HE OTHER until Feb 2022. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860 http://hbr.org WHAT DREW YOU TO THIS STORY? Endeavor Global, the subject of the original teaching case, developed a set of ideas about the ingredients for successful entrepreneurial action. The case focuses attention on whether its model could be applied anywhere in the world. HOW DO YOUR STUDENTS RESPOND TO IT? Most think Endeavor should stick to emerging economies and not muddy its mission by going into a U.S. city. A few see the potential benefits to the organization and its mission. WHAT LESSONS DOES THE CASE OFFER? One lesson has to do with getting local buy-in. Endeavor is successful only if leaders in each community embrace entrepreneurship, and that can’t be accomplished from a distance. targeted, an audacious goal given the long odds facing any emerging- market start-up. Helena realized that to meet that goal, Unamano had to carefully select the most promising entrepreneurs to assist, putting candidates through a gantlet of pitch sessions, refer- ence checks, and interviews. Once anointed as Unamano Entrepreneurs, or UEs, they would receive abundant free advice from experienced local advisers, be introduced to local and global mentors and service provid- ers, and attend conferences and meet-ups. Successful UEs would be expected to become the next generation of local angel investors and venture capitalists. Put simply, Unamano aimed to build entrepre- neurial ecosystems where none had existed before. Within a decade the organization stretched well beyond Latin America to the Middle East and Asia. It had 12 country offices in places as distant as Jakarta and Dubai and, while about 30 people worked in the New York headquarters, another 250 staff members were scattered around the world. Businesses run by UEs gener- ated $6 billion in annual revenue and employed 225,000 people. Helena had been profiled in Forbes, the Wall Street Journal, and the Economist as a champion of entrepre- neurship. Although she was based in Manhattan, she traveled constantly and was a frequent keynote speaker. Still, she hadn’t for- gotten her roots. She spent most holidays back in Miami. And it was over Easter, a week after Conrad’s board presentation, that she finally had time to catch up with Guillermo. Helena still remembered her cousin as a friendly, energetic adolescent; she and her sisters had called him el cachorro, the puppy. But he was now a postdoc working on a desalination project that he believed could solve South Florida’s water problems. He’d found a recep- tive chemical-company owner who was providing lab space and even some financial support. But it was clear that Guillermo was much more of an engineer than a businessman, and despite his outgoing nature, he hadn’t been able to find new mentors or investors. Helena could see that his aspirations were being choked by lack of access to experienced businesspeople. “Is there anything Unamano can do for me?” he asked plaintively as he was leaving the holiday dinner at her parents’ place. Helena told him she was sorry, but it was out of the question. For now, at least, Unamano was focused on emerging markets, like Latin America. It didn’t have U.S. operations. “But that makes no sense,” he pro- tested. “The capital of Latin America is Miami!” Guillermo had a point. Miami- Dade County, 66% Hispanic, was home to more than a million Latin Americans, some displaced by dys- functional regimes at home, others seeking opportunity. It should have been a prime area for entrepreneurial activity: It had a solid technology infrastructure and a lot of people aged 25 to 44—many of whom were engineer- ing or computer-science graduates—as well as a large local consumer market. But Guillermo’s struggles weren’t unique. The local economy hadn’t diversified beyond its base in tourism and real estate into fast-growing areas such as health care or bioscience, and entrepreneurial success stories were HBR’s fictionalized case studies present dilemmas faced by leaders in real companies and offer solutions from experts. This one is based on the HBS Case Study “Endeavor: Miami Heats Up” (product no. 814043-PDF-ENG), by William A. Sahlman, Ramana Nanda, David Lane, and Lisa Mazzanti, which is available on HBR.org. few and far between. R&D invest- ment had been growing, but slowly, and the region didn’t generate much early-funding activity. In the past year only 16 firms in greater Miami had received venture capital. People with entrepreneurial ambitions learned early on that to seek their fortunes, they needed to move to New York, Boston, or the West Coast. Amazon’s Jeff Bezos, the valedictorian of his class at Miami Palmetto Senior High School, had been part of that exodus. As a result, Miami was a prime example of widening economic inequality. While millionaires abounded, most people in the region were losing ground economically. Helena’s and Conrad’s fami- lies represented those two poles. Helena’s father had run a coffee-and- sandwiches cart in downtown Miami. Conrad’s was a real estate investor in Coconut Grove. Conrad still lived in that neighborhood and now ran multiple companies, including an oil-exploration