The photo above does not capture at all the scene in the evening of the 40th day after typhoon Haiyan had hit ground zero. It is a photo, taken from a moving van, of a long road in the still no electric power Tacloban, where thousands of candles were lit up on kilometers of the road to remember the thousands who died during the storm. We don’t want you to think we take this event lightly, as the title of this article may suggest. So what does a start-up movement have to do with disaster and relief operations where so many have died? A lot, if we are to base it on what we have seen in Tacloban, Leyte. Let us begin by tackling multilateral organizations. There is no bigger organization or bureaucracy in the world, probably, than these global humanitarian organizations (Medicin Sans Frontiers, Red Cross, International Organization of Migration, World Food Program, the United Nations). We can even say these groups have some the strongest brands in the world that will be the envy of equally large, but for-profit organizations, like Coca Cola. Would you stop in the street to give someone money for whatever charity Coca Cola is working on, or for some product the company is developing? Think of UNICEF or World Vision in contrast.
We have read so much about the unintended consequences of aid agencies swarming places like Africa; like capturing local talent that eventually joins the aid agencies’ exit of the area. We never expected to experience some of these unintended consequences, and of all places, in the Philippines; not a rich country, but by no means is it wallowing in famine or war. But as soon as our plane landed, we knew it was a different Leyte we would be seeing. In spite of the barrage of television images, and the usual sentimental and caramel-laced ABS-CBN reporting, nothing prepared us for what we saw. From the air and on the ground, we saw dozens and dozens of white tents, army helicopters, fallen trees, and houses and buildings torn to shreds: it was a scene straight out of the movie MASH (about the Korean war), or some B-movie probably entitled “World War III.” This is serious business: and the word “calamity” doesn’t even begin to describe the gravity of what had happened, especially for us who have many friends in Leyte.
There are two ideas, or tools, we want multilateral aid agencies to explore: “customer discovery,” which “searches for problem/solutions fit,” and “get out of the building,” which should lead to the concepts about stating your value proposition, pivot, and innovation. (See our previous post on Steve Blank and Saving the World). The people of the Start-up Movement, from Steve Blank to Eric Ries and many others, have taught a lot to entrepreneurs who are inventors, software programmers, businessmen, corporate executives. Non-profits, especially gargantuan organizations like the United Nations, have a lot to learn from the movement. Eric Ries defines a start-up as “an institution, not just a product, and so it requires a new kind of management specifically geared to its context of extreme uncertainty.” There is no more uncertain situation that probably surpasses any business environment of a start-up than a few hours or days after a cataclysmic disaster hits a locality.
Who are the customers of the United Nations in Leyte? What do they want? We at Sunfu think multilateral relief organizations are overly concentrated on relief operations and their operational/logistics capabilities, as probably perfected in their business plan, but the creation of their business or execution model is largely flawed from the start. For one, the scale of the operations is so big and the resources of the multilateral agencies so massive, they create problems with their bigness that, having read about these problems over two decades ago, we realized they haven’t learned anything from the criticisms of their host countries that we have read about. For one, almost all the hotels have been commandeered by multilateral agencies, like the United Nations: they just take whole buildings and whole blocks, and in a short-sighted view it looks like they are helping local businesses, but in the end, they are actually hindering it because all of a sudden, the whole island’s operations shift from getting back on their feet mode, its disaster relief mode is prolonged. Now what is wrong with that? A lot.
The real customer of these relief organizations is the country. The whole interlocking relations that make the flow of life possible has just stopped. People from outside the island of Leyte, or even just the city of Tacloban, will have a hard time moving in to help or bring back normalcy into the place, to look for family, or to begin looking and connecting for business opportunities, because all of a sudden, there are no accommodations for months, all the restaurants are filled up, and so life is in a stand still because the multilateral organizations have a whole set of checklists they have to fulfill in order to report to headquarters in New York, or Geneva, or Paris that they have done their jobs: the right photo opportunities have to be taken, the right video clips have to be shot, and as Ban Ki-moon appealed for today, more funds would move in to feed this cycle. The infrastructure of the island that survived are being commandeered by the size, good intentions, and wealth of these giant aid agencies, which feeds more the need for relief, and we fear, they will further institutionalize mendicancy. Most hotels, even lousy hotels, have been booked for until June 2014. Do aid agencies know of these consequences? Do they know their customer?
Part of the panic, which fed into the looting, was caused by the fear that there would be no food available commercially. Money thus becomes worthless. Yet for us, the Sunfu team, it took us hours to find breakfast, because the available restaurants were filled up with aid workers, some with the insensitive posting on the entrance of an establishment saying this or that restaurant is exclusive for this and that group. The result is some of us had to go out for hours looking for breakfast, losing our patience and temper a few times, because the paratroopers of agencies like the U.N. have not been going out the building, or in this case, their hotels, except to distribute relief, do site inspections, and prepare for the arrival of agency bigwigs. But the area, the city, or even the whole province will not rise if the ecosystem of the whole province is under the strangle hold of multilateral agencies that want to make sure their tents are up, the food packs readily available, and they have done their mandate. Who can argue with that? A comment from one of the barangay captains, which I thought worth repeating: “The stores are beginning to open, which is the best sign that things will go back to normal.” But the aid agencies are hindering the flow of goods as trucks and other kinds of vehicles have been rented out at incredibly high prices. In fact, she said if the looting did not happen, whatever the devastation, people would have been able to pick themselves up faster. The point is get the customers up their feet, and the fastest way is to give them the capacity to get up: if you are in a medical mission, after the mission of a few days, just enough time to give the local doctors to recover, they leave them capacity to do their jobs. But that would be very expensive, and less dramatic. Not much photo opportunity, and fewer occasions to have contact with the media and the general populace. The validation of the customer therefore should not be in that the patient is not dead, or is up and about, but the validation is if their lives have gone back to normal as soon as possible, or is it even better and more productive than before. From our angle, what we see is most multilateral agencies are there to help, but their help ends with the “feeding mission,” or the “medical mission.” Tzu Chi, the Buddhist charity organization, seems to have gotten it right. They immediately did a work for money program: help clean up certain streets of debris and you get money. That helped clear some streets. They also had a medical mission component. Yet they also just distributed money, and we are talking about P10,000 to P20,000 (in US dollar terms it’s somewhere at the minimum of USD200 to USD500). The group gave people capacity and capacity immediately to get some of the resources they knew they needed and wanted, and it gave some life to the local economy. Tzu Chi left immediately afterwards, and its members were not in the way by hogging resources of the place (very Buddhist).
There were sardine cans from charity organization being sold in the market by recipients, hardly any takers, as canned sardines coming from charity organizations flooded the island. Recipients of these sardines were simply sick and tired of sardines, after weeks of nothing but sardines. They want variety, they want to move on, they don’t want the same fare day in and out. Inedible relief food packs have found their way in the market: with hardly any takers. This is not corruption, as some in media have claimed: this is the market somehow throwing out (vomiting) the food it is being fed, trying to monetize the situation in order to get going. One of the biggest hits, and the long lines of people waiting for their turn was the best proof, was when Mayor Sandy Javier’s restaurant, Andok’s Manok, opened: people patiently waited for hours to pay good money to get some juicy roasted chicken. Nothing like good food to heal the body and uplift the spirit. Even we fell in line. No doubt his being mayor of a small Leyte town and he is somehow also related by party affiliation to the province’s governor helped, as government electric generators helped light up the establishment’s surrounding area. But good food is good food: whatever the criticisms were muted by great hot crispy juicy chicken.
We know it sounds callous to be so calculating, at the same time critical of multilateral agencies who certainly want to save lives as well. But the multilateral agencies we observed were actually not looking at capacity building: they were looking to yes saving lives, but they were simply also looking at this as a job, a good job, a serious job, a vocation even. But they were not looking at this as an entrepreneurial enterprise that would fold up if it didn’t succeed in hitting its goals of making the customers happy, or getting the customers’ lives back to normal, immediately. And here is the other suggestion we can take from the start-up movement: verbalize what you or your founders are trying to do. If I am to just cite two perceptive and very interesting articles written about the disasters that have happened to the country, the phrase that stands out is “capacity building.” This is what is needed: capacity building. Very important. Equally important is to ask: But capacity for what? This is not about giving the fisherman boats and nets to fish: it is a lot more than this.
The first article is by Gabriela Luz, who works with Oxfam. She writes in the Philippine Daily Inquirer about what has happened to them in earthquake-struck Bohol, after Haiyan devastated Leyte: “In a natural disaster, the immediate assumption is that the most vulnerable are stripped of basic needs: food, water, shelter. There’s a race against time to deliver aid that would meet the big three. We in humanitarian agencies have been working in emergencies for so long that we’ve broken down aid to food packs, hygiene kits, water kits and emergency shelter.
“What happened in earthquake-struck Bohol was that agencies working on the ground were still trying to meet these needs when Yolanda hit, and then markets instantly dried up. Cebu was the nearest large market and logisticians trying to procure supplies were shut out. Supplies coming into Tagbilaran were suddenly diverted to Cebu hubs because the needs were bigger and more immediate in Yolanda-hit cities with zero systems.
“Granting that you can purchase the right number of aid kits needed, there’s still the problem of getting these in. What happened in Yolanda is that places like Leyte had no local suppliers. There were no vehicles, no fuel, no trucking. Everything had to be sourced from the outside. You’re scrambling to get the next available vehicle—but you’re not the only organization trying to do so. Suddenly, suppliers who could bring relief in were in high demand and could control prices. It was costing up to P10,000 just to rent a vehicle. Trucking companies were canceling arrangements in the middle of the night, right before a distribution, because of higher bids worth more money.
“Hand in hand with resources is the human element. In the humanitarian field, only a relatively small number of people are equipped to work in emergencies. Finding someone to do emergency work means finding a person with the technical expertise, knowledge and experience not just to respond but also to figure out how to go beyond response and move toward recovery as quickly as possible. Immediately after Yolanda, experienced humanitarian workers were being pulled out of Bohol to work where the need was greater.
“Recognizing that a competition of emergencies can happen is important because the pressure of it consistently happening should add to how we understand the scale of preparing for disasters. Here are some things we should consider to acknowledge this problem:
“Capacity-building and going local. We know that we are a country overrun by disasters and that it’s going to get worse. And we know we don’t have the personnel to respond to this on our own. We need to spread the knowledge, the capacity, around, so if we ourselves can’t do it, then we know others can.”
It is interesting to read the article because coming from the point of view of someone who works for a giant aid agency, she looks at capacity building as being prepared for disasters. While we advocate for start-up tools, we also advocate capacity building, in allowing the locality to figure out what they need to be strong, not for disasters, but for life, maybe with the help of aid workers getting out of the way after the initial stage of relief: or at the very least, to get out of the relief mode and immediately into capacity building, not for disaster preparedness (as Nassim Taleb would say, there is no way of preparing for Black Swans, but there is a way to be Anti-Fragile), but to be strong and have a mind set of strength by helping provide the mental tools to have the mind set of running their lives, or households, or employment, or companies as start-ups. The whole NGO and multilateral aid agency community must get out of the disaster relief mind-set, and it must get into the entrepreneurial start-up mode.
Here is another article, this time by Art Villasanta and Peter Galace, also published in the Philippine Daily Inquirer just three days after the above article from the Oxfam worker: “Tom van der Heyden, a satellite expert who works in the Philippines, said the country needs to be properly educated to properly appreciate what a satellite can do. He noted that its satellite requirement ‘has always been urgent.’ The Philippines, however, needs to have people in the highest positions who understand what can be done with a satellite.
‘Buying a truck will not help if you have no experience driving a truck. The country needs to build up capabilities, and then a satellite, so that the satellite is not just a drain on the economy but can serve the people and business,’ Heyden said.
“He emphasized that the Philippines also needs a satellite for maritime security and to protect its waters and borders. In this vein, Pimentel said the Philippine military should have quick-deploy VSAT systems and a hub with the necessary IP backhaul connectivity. ‘It is pathetic that today, the VSAT network of the [military] is actually on a Chinese satellite!’
“The Philippines has orbited only two satellites: the derelict Agila-1 and Agila-2, which is now operated by Asia Broadcast Satellite, and serves Africa. ‘Forewarned is forearmed’ is a lesson we should have learned long ago from the unending procession of natural disasters that pummel us without fail every year. We must immediately heed this lesson. Nature is not merciful, and never will be.
“We need a Philippine satellite now to save Filipino lives in the future.”
The excerpt above talks about “build(ing) up capabilities” in the high tech sense of having the technology, in this case a satellite, to withstand another typhoon Haiyan. We think in this blog we are writing, our point about capacity building is clear: we are different from these two articles in that we interpret capacity building eventually as a mind-set first, with approaches to the problem (the start-up movement tools) second, and third, but no less important, an eco-system within the local and national boarders (how unfortunate that we still have to talk about national boarders in the 21st century) that makes it possible for channels of commerce, goods, health care to freely flow and be strong no matter what situation, even after a major disruption by an earthquake (Bohol), invasion of gangsters (Zamboanga), or a typhoon (Leyte). After the initial first week: the relief mentality must immediately shift to local capacity building. In fact, it is a golden moment to get a community to be better than it was before the disaster.
With organizations like the United Nations, the magnitude of their operations and the professionalism involved: you know even if pursued with passion, the organizational momentum is towards feeding and temporarily housing people: these tasks will take up most of the organizational energy. This is partly, but also hardly, capacity building. Steve Blank is now talking about metrics and software programs that measure indicators of success of a start-up, and that has got us worried. We think that many victories and successes of a start-up, aside from the bottom line, will never be measurable, because a surviving start-up is a confluence of events and initiatives as it looks for a scalable model. The danger, always, for the start-up is that it will not be able to withstand the shocks the competitors, the market, and other Black Swans are throwing at it. The other danger is that it will start looking and believing that what matters are what are measurable, which is a trap of these giant NGOs and aid agencies-mind set. But the reason we are enamored by start-up thinking tools is because we think Steve Blank and the other articulators of this movement are able to find the equipment (or point-of-view) for people, entrepreneurs, to understand and take the shocks, by being lean and agile, by having the correct mental outlook and desire to fail, fail fast, and pivot.
And here is where getting out of the building is important: the concept in the start-up movement is for the founders or entrepreneurs to get out of the building to meet the customer, to develop customers and knowledge of the customers, to see their problems, to find out what they want and what are the solutions. Aid workers will tell you that in fact they are out, seeing the problems, and solving them. But we would argue, the generals of this army, like Ban Ki-moon, and the rest of the team should stay out of hotels and, in the evening, sleep in their tents (literally) during the duration of their stay. They want to spend money, then instead of spending them on hotels, rent out parcels of vacant land for their UN tents for their staff and generals to stay in. Perhaps they will find out why, in spite of so many tents available, people prefer to go back to their destroyed houses. Many tents are actually unoccupied. Other charitable organizations, when out there, will find out that, locals and local government officials do not know what to do with old clothes being sent their way, and if it will not offend, we have no doubt many of them would gladly pour some fuel and throw a lighted match on the clothes. They don’t need them. Those that do, they want new clothes. Local governments are in fix as to what to do with donated used clothes, without appearing ungrateful.
Indeed, a provincial administrator of the local government very provocatively asked: why have most parachute doctors and hospitals from donor agencies and countries not visited the local public hospitals and given or helped the local hospitals in having the capacity to do their work, as the local doctors there know the culture and the language of the area? The patients are flocking to these places, only to find devastation. The local doctors are just there, waiting. Some of the most sophisticated medical ships, mobile clinics, military hospitals came over from different countries, mostly from countries that have experienced or are currently experiencing military expansion, thus the development of very mobile medical teams and equipment. But they never gave the local provincial hospitals and doctors capacity: hardly anyone asked how they were doing. Sure a tent or two, with some medical tools were left behind by a group, but it was not even a dot in the ocean of need. The local doctors who know the problems, local language, the patients and their medical history: they were just left to clean up and wait for the national and local government to get their act together and go through the tedious task of meeting stringent purchasing rules to get the necessary equipment to get going. This is not a criticism of the local and national governments, but an acknowledgement again that the bureaucracy has its own rules and momentum, its own checklists of requirements, that dictates its actions and ability. It cannot move unless certain boxes have been checked. It needs a start-up culture, or at least it needs to have start-up clusters and teams. Yet local governments have the edge of having the local knowledge of each area’s idiosyncratic culture, specifics of who is in need, and the location of infrastructure to get whatever needs to be brought to the end-user. It will be difficult, if not impossible, to ignore them. Of course just like the experience of the Red Cross in Bohol in getting into a conflict with a town mayor who wanted to have a say in relief distribution, there is fear of being sucked into the local politics of each locality, thus the desire to avoid local officials. Fine: then get out of the hotel and literally stay in your tents as home and office: live literally on the ground. This way, not only is the feed back loop easier, faster, and more realistic: they do not hamper the normal flow of commerce by hogging all the resources of the locality. If bringing and cooking your own food is a problem, or is simply not the solution, leave half the space of the restaurant for other locals, do-gooders, entrepreneurs, scientists, and aid workers to buy their meal. Of course hospitals getting donated medical equipment will not be good for local businesses like Sunfu, so maybe donating countries can purchase equipment from businesses like us, and if they prefer, they only buy equipment that are manufactured or invented by their countrymen that businesses like us sell, as a sort of compromise (as this seems to be an issue for some); or better, support equipment invented and manufactured by us (although honestly medical equipment manufacturing is still a pipe dream in this country, as there is no capacity: although Sunfu Solutions is trying, and may partner with Dr. Harvey Uy in the future for some initiatives in ophthalmologic solutions).
Yesterday Ban Ki-moon appealed for more funds for food, shelter, water, and health. We could only imagine if this almost $1 billion US dollars of fresh funds could be used to fund an honest-to-goodness start-up movement within the UN for Leyte, and on the ground where their foot soldiers are all out trying to make a difference in the lives of Filipinos. There is a big movement in the Philippines called Go Negosyo, which encourages Filipinos to become entrepreneurs in a culture where dreams are for our loved ones to join the biggest corporations, which can withstand the shocks thrown by life at an individual. Work for a great big company and they have health care, insurance, yearly bonuses, and so on to protect the employee. We have always approached the Go Negosyo program with skepticism because, for one, the underlying current of the initiatives is government cannot help you, and for its failures, you are on your own: so look at these millionaires and billionaires (some of them modern day pirates) and see if you can be like them. The end goal, end philosophy, is to be self-sufficient. In the context of the Philippines, the start-up movement is worth pursuing, as it provides the outlook and tools in working towards self-sufficiency, but it needs to be added, in the context of the Third World, with the consciousness of the need for local capacity building, technology transfer, management innovation, and human capital development. The task and challenges are enormous: the start-up movement just provides conceptual tools to get started, to withstand and understand the shocks, the Black Swans, and if successful, to have the necessary mindset to see the world with eyes of a hungry and innovative entrepreneur.
In the context of the Third World, we know many of these apps and technologies out there, being produced by start-ups in places like Silicon Valley, are just toys; made for the First World, or worse, made for venture capitalists. (See article in “Can Silicon Valley Save the World?” by Charles Kenny and Justin Sandefur in Foreign Policy, July/August 2013, about innovation in the devices and gadgets supposed to help the Third World defeat poverty that are impractical if not laughable: example, a solar powered soccer ball that generates power when rolled, but cost maybe 10 times more than more practical and less sexy gadgets. Cute, but no thanks). We need local capacity-building start-ups, not band-aid solutions, we need start-ups that have a culture that will save lives beyond mendicancy, and on the other extreme, start-ups must also look beyond just the bottom line and the great global technology fetish. We do not need start-ups like a new gasoline station company in the Philippines which declared that it is decorating and lighting their gasoline stations like First World gasoline stations. Shell and Petron have done that years ago in the Philippines. Their other stated goal is to franchise out as many gasoline stations as the wildly successful Jollibee Hamburger. That’s innovation?
One of the most precious commodities for days, after typhoon Haiyan hit Leyte, more precious than gold, were to have liters of gasoline to run vehicles. People fell in line for over a full day to get their share, and only the opening up of alternatives like in the photo below alleviated the pressure on the community, which served to dissipate the panic. The black market helped calm down the communities, because money, the traditional medium of exchange and value, is back in circulation. How can gasoline stations service small entrepreneurs in the photo below, without being a danger the environment (using water and soda bottles as gasoline containers!), and skyrocketing prices? The need for goods to be readily available, not be hogged by a select few (no matter how good their intentions), they need to have a mind set to state the hypothesis or goal, to know the customer and have the hypothesis validated, and to literally get out of the building (and for multilateral aid agencies to live outside the hotel buildings) are necessary: we need a start-up culture obviously, yes, and we also need a start-up set of tools, sure; but equally necessary, we should not be too target driven when we enter a business or a relief operation, because we should be looking, with a clear and hard eye, at what the customer wants and needs. We cannot enter a situation with our preconceived notions. One of the great ideas articulated by Steve Blank is that no business plan ever survives first contact with the customer. Think about that. Why is that so true United Nations?