Entrepreneurship in Guateca
Anthony Cerrato and Jeremy Wong
Meet the Group Members:
Jeremy Wong — Member of the Non-Exclusive Entrepreneurship Group
A fourth year Biomedical Engineering Student whose ambition one day is to create his own business.
Anthony Cerrato – a third year Crops student
After the first Guateca summer program in a village in San Pablo, Guatemala, Peter Schwartz really wanted to have businesses from the program’s appropriative technologies, but it did not happen. He proposed a project of learning how can a business be created from successful appropriative technologies. Our group, The Entrepreneurship group, consists of students from Cal Poly that are not from the Business Department, and sought out help from teachers and students who did know about Entrepreneurship. The group went to a small group on their campus called the “Student Startup Assistance Team,” and they showed us The Business Model Canvas. After looking at what this canvas did and how it was used, the group’s goal was to create some manifesto that could be used to create any type of business in small, rural communities. However, after much consultation with Pete, the group decided to look at a particular case. This project is to look at the Nursery project and implement a business plan that might work in San Pablo, Guatemala.
There is an issue of keeping long term success of an appropriative technology (1 year or more) in a developing country. There needs to be a way to ‘bridge the gap’ between the technology and sustainable business. Our group is in conjunction with the San Pablo Community Nursery, analyzing the viability and practicality of creating a business out of their project.
Problem Statement: The aim of this project is to bridge the gap between Appropriative Technology and business to spur growth within the community of San Pablo, Guatemala by investigating another project to adopt ideas of the business model.
- Proper education to use these technologies
- Competition from the private sector
- Hurdles from the government
- Lack of resources
- Money to fund this “gap”
Guatemala and Guateca
Guatemala is a country in Central America that borders Mexico to the north.According to the US State Department, they estimate that Guatemala has a population of 14.7 Million people.  As of 2009 The GDP per capita in Guatemala is $2,661 in US currency, as seen in figure 1. The figure was obtained from Google Public Data Explorer, and their data comes from the World Bank.
Figure 1. GDP of Guatemala per capita as of 2009.
The group was briefed on the Guatemala project in class by students from the program. In the village in San Pablo, Guatemala, there resides under a thousand people. The village is located in the north-west region of Guatemala and is at a high elevation in a tropical region. During Guatemala’s Civil War, between 1960-1996, the village was isolated from the rest of the country. For that reason, the villagers all know each other very well, and their families are very close. Over those years, the village sustained itself, keeping their village in relative tranquility. The villagers didn’t trade too much during that time and farmed their own land. Today, the village generates its income from selling fruits and vegetables, mainly tomato and roses, and working in the bigger cities. Some families receive remittance from family members who are working in the US. Generally, those who grew up in the village decide to stay in village when they grow up. The village has a small school, church, and community center where local events and gatherings happen.
Over the last summer, a group of Cal Poly students stayed in the village for two months to learn and collaborate with other students from the area. The group implemented appropriative technologies that the village could benefit from, and spurring quite a few successful projects, in the short run. Pete’s worries were that these technologies will not be maintained because he knows the they can wear down and break over time. The goal of the summer project was to make it someone in the village’s job to maintain the technology after the group left, allowing the villagers to generate income in their local economy. Figure 2 shows a small business in Guatemala that generates its own income.
Figure 2. A boutique in Guatemala representing a small business
What is an entrepreneur? It is a person who organizes, operates, and assumes the risk for a business venture. Not all entrepreneurs are for profit; a Social Entrepreneur develops an idea that benefits society, such as overcoming a social problem, rather than a commercial idea. The hopes of the project is to help generate (or at least begin to generate) a steady income for the local entrepreneur, create jobs or many jobs, pass on solutions (for a price) for others in their community or neighboring communities with the technology and it’s fun!
Factors Affecting Business:
To understand the small, niche markets of San Pablo, there’s a number of factors to take into consideration. There is the culture & customs of the people. For example, family and the bonds within the neighborhood are important to the locals. There are the perceptions of the people, or what is the perceived benefit the customer sees your product as instead of what you designed your solution to do. There is the economic situation of the people, who have relatively lower economic wealth than the average US citizen. Unlike people in the US, the overall wealth of those living in San Pablo are lower. There is the education level of the people. There is importance to educate someone know the tools of the trade of the technology for long term sustainability. Finally is the environment of the area; resources are scarce, which creates opportunities.
The Business Model:
Many US businesses use the business model canvas to learn more about how the product or service should be created and implemented. The canvas is used at The Cal Poly Center for Innovation and Entrepreneurship and Innovation and is from Business Model Generation. This template will help our team figure out how it applies to appropriative technologies.
Before going through each of the sectors of this canvas, the caveat to this whole analysis that the group is doing is that the nursery project isn’t necessarily successful. The end result of the analysis can be either it should be pursued as a business or it shouldn’t (or we don’t have enough information). The way to read this canvas is to start in the top right at the customer segments. This is broken down to the individual(s) who will use this product, not just some arbitrary group like “Guatemalans.” The next thing to focus on is the value proposition, which is how this product will improve or aid the lives of the customer.
Then the focus is on customer relationships and channels, which focus on the ways in which the value is brought to the customer, as well as how the customer is treated with the added value. Then you look at profitability called revenue streams. This allows the business to stay a business for the long term. Then the more nitty gritty things are on the left side of the canvas. There are your key partners, which we consider to be the Guateca project as well as NGOs and surrounding businesses that may aid in these businesses. The key resources are the supply chains of the service or product the business is trying to sell. The key activities are the necessary components for the pieces of the value to come together. The cost structure is the last thing to consider because it is how the whole picture comes together, taking into account everything else in the canvas.
The villagers are the main stakeholder of the project. They have the most to gain from accessing a nursery. Another stakeholder would be the other city whose business will be cut from farmers who don’t use that nursery. Lastly are the students who go down and collaborate with the villagers in creating this nursery.
 July 27th, 2011. http://www.state.gov/r/pa/ei/bgn/2045.htm