Sep 03

Lessons from Luanda: Insights on Risk and Separation from Social Enterprise

I am rarely one to rest on playing it safe – both literally and metaphorically. I began my career in entrepreneurship not by joining a well-funded start-up in Silicon Valley or Kendall Square, but by enrolling in the Peace Corps to help new businesses lift Dominicans out of poverty. In many ways, my early 20s was anything but comfortable: I was responsible for helping men and women of all ages with little education and business acumen create sustainable enterprises; I lived under a tin roof in the mountains where I bucket bathed, warded off various forms of tropical vermin, and nearly burnt to a crisp when the wire carrying my pirated electricity to my three light bulbs and outlet frayed; I sweated through Dengue fever when there was no other option. In spite of these hardships, I actually returned to the Dominican Republic and Haiti in my mid 20s to found the first Caribbean subsidiary of a social enterprise that had successfully provided access to social impact technologies in other parts of Latin America. I suppose that I thrive on beating the odds in higher risk markets to prove that high return is possible with the right idea, the right team, and the right go-to-market strategy.

It may thus come as no surprise that for my last summer internship as a dual degree graduate student (MBA @ MIT and MPA @ Harvard Kennedy School), I decided to leave the comforts of Cambridge to join a recently launched e-commerce company in Luanda, Angola.

In my late 20s, oh-so-hard-to-acquire visa in hand and vaccinations up to date (thank you, Harvard travel clinic), I thought that I was ready to help Jumia, Africa’s leading “Amazon equivalent” under the global Rocket Internet umbrella, beat the odds within its newest market. On the Friday afternoon capping week eight of what was intended to be a ten week internship, I discovered how wrong I had been: in spite of our efforts, new contracts acquired, and increasing market penetration, our investors abruptly decided to let all employees go on the following Monday and shut down our Angolan website that Tuesday. In terms of opportunity costs, it made little sense to invest finite resources in a struggling market and operation when other African markets forecasted greater ROI.

I am leaving out a key factor in this equation: when I arrived in Luanda to begin my “business development” internship, I found out that Jumia Angola’s immediate need was in fact a Head of Sales to manage the team and processes responsible for contracting the distributors that would provide our website with an array of electronics and fashion products. In assuming this role, I became the director responsible for increasing merchandise assortment to meet the targets set by our global headquarters. When we closed, I was crushed: I had truly felt that I had reached the point where I was building the capacity and accountability within our sales team needed to increase our contracts, and where I had created relationships with the key distributors needed to become the e-commerce market leader in the country.

Through the risk that I took to attempt success within an entirely new market, I realized that I had previously relied on one safety net: secondary returns. Previously an international development professional, I came from a world in which metrics beyond pure bottom line matter: were we enabling workers to support their families? Were we disrupting the way that families in the developing world accessed the products they needed to improve quality of life? While Jumia Angola did provide both of these things, ultimately it was a for-profit company focused on earnings, and Angolan market conditions looked poor for the rate of growth their parent company ambitiously sought.

Although the part of me that has studied and worked in development economics wishes I could have changed the market – that I could have helped resolve Angola’s current dollar crisis and resultant importation challenges, as well as its dependence on oil revenues when the price of petroleum has dropped substantially – certainly numerous factors that investors considered were out of my control. I could beat myself up for feeling that I could not protect those I managed vertically and those outside Jumia with whom I built horizontal business relationships, or I could accept that – unlike in international development – it was not actually my responsibility to protect anyone at all. Each of us had assumed risk individually – to either work for or partner with a model that was new to Angola; one that operated on a lot of presumptions, ranging from favorable economic conditions we ultimately did not have to the ability to acquire early adopters…in a society where internet penetration is still relatively low and the ability to trust new innovations still relatively weak just over a decade out of a 27 year civil war.

Given that the branch of the company that I joined this June no longer exists by this point in August, I am struggling to quantify the impact that I had on Jumia; however, I can better measure the impact that it had on me. It has not deterred me from taking future risks nor pursuing future investments in emerging markets; it has instead taught me how to better leverage my insights from cross-sectoral work and studies. An understanding of macroeconomics, regulations, politics, and social capital was very important; perhaps my longing for social impact within the company was something I needed to acknowledge as peripheral or nonexistent.  I do wish Jumia all of the best in its future investments, and I hope that there comes a time when a better business case can be made for re-entering the Angolan ecosystem. In the meantime, I hope that my Angolan colleagues who lost their jobs can leverage what they learned about technology, innovation, and start-up challenges to escape the unemployment trap quickly. I can afford to live more dangerously because I still have one year left of graduate school in which I can continue to experiment.

Alanna Hughes is an InSITE Fellow in Boston and an MPA/MBA Dual Degree Candidate at Harvard Kennedy School & MIT Sloan School of Management

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