There's Something Growing in the Amazon: Business Model Creation in an Unlikely Setting
By Jennifer Li JGSM 2010
Issue date: 9/9/09 Section: Johnson News
It was my second day in the Ecuadorian Amazon. I was hiking through the 4,300 acre rainforest reserve protected by the Yachana Foundation. The morning's rain had left the trails slippery and difficult to manage. My rubber boots got stuck in the mud in some parts and lost their grip in others. These conditions, however, did not seem to faze my companions: twenty kids between the ages of fourteen and eighteen, most of whom had grown up in the rainforest. In front of me walked Leidi, a quiet but friendly girl of fifteen from the neighboring town of Agua Santa. I kept up with the group mostly by following her footsteps as she navigated the hazards. Suddenly, she turned and warned, "¡Cuidado!" After a few more steps, I saw what she was referring to. As I eyed the steep and muddy descent before us, I couldn't help but wonder if my decision to pursue a non-traditional summer opportunity had been a wise one.
I traveled to Ecuador as a 2009 Center for Sustainable Global Enterprise Fellow to work with the Yachana Foundation ("the Foundation") on developing a strategic plan for this unique for-profit / non-profit hybrid organization. The Foundation was established in 1991 by Douglas McMeekin, a Kentucky business man who moved to Ecuador in 1986. "Yachana" is an indigenous Kichua word that means "a place for learning." True to its name, the Foundation is committed to improving the lives of the indigenous and mestizo populations of the Amazon through education and opportunity creation. In 2008, McMeekin was selected as an Ashoka Fellow, a distinguished position as a leading social entrepreneur.
Today, the Foundation focuses on running the Yachana Technical High School ("the High School"), a boarding school covering the equivalent of grades ten through twelve of the U.S. school system. Designed to make education accessible to kids from the Amazon, the High School is structured differently from traditional Ecuadorian high schools. Because of this, prospective students are required to attend a week-long orientation, during which they shadow current students in everything they do. Leidi, along with the other nineteen kids on our hike, was visiting the High School for this orientation.
For kids like Leidi, obtaining an education is a challenge for several reasons. Their families have to cover not only the tuition and board at the school, but also the opportunity costs of losing their kids' help on the family farm while they are at school. In addition, the traditional Ecuadorian education system teaches purely academic subjects through rote memorization, which does little to prepare students for the job market. As a result, many students do not see the value in secondary education and drop out before completing it.
Established in 2005, the Yachana Technical High School is structured to tackle these problems. Located in the Amazon three hours by motorized canoe from the nearest city, the High School runs on a rotational twenty one-day structure. Students alternate between spending three weeks at home and three weeks at school. Subjects taught include agronomy, animal husbandry, micro-enterprise, eco-tourism, conservation, English, and basic computer skills. The High School encourages its students to "live their learning" by managing an organic farm that provides 40% of the school's food. The High School also encourages students to bring their learning home to help their family farms achieve better results. To make the school more financially palatable, the Foundation heavily subsidizes the tuition. Although it costs approximately $1,800 per year to educate one child, the annual tuition is set at $120 per student.
As of 2009, the High School has served 150 students, 80% of whom are indigenous. The students represent five provinces and four ethnic groups. Two classes have graduated. Some graduates have returned home to work in their communities while others have stayed to work at Yachana Lodge. Still others have come to the U.S. for further study in English. The Foundation is poised to begin building the Yachana Technical Institute, a two-year technical college, in response to graduates' desire for a higher learning program based on the same practical education model.
To finance the difference between the cost and the tuition, the Foundation has been experimenting with a for-profit / non-profit business model. While the majority of operating expenses are provided for by grants and donations, the Foundation also generates income from various for-profit ventures. The largest is the Yachana Lodge ("the Lodge"), a geotourism destination within walking distance of the High School. Winner of the 2008 Ashoka and National Geographic Geotourism Challenge, the Lodge gives visitors an opportunity to not only explore the rainforest but also learn about the lives of the indigenous communities. The Lodge has a deep symbiotic relationship with the high school. It offers a training ground for students to practice skills learned in their eco-tourism class in positions such as nature guide and food server. Interaction with guests gives students deeper engagement with the outside world. In return, the school offers guests a window into the lives and cultures of the students. In addition, the school's organic farm provides food for the Lodge.
From 2000 to 2009, the Foundation owned and operated Yachana Gourmet, a Fair Trade company that bought cacao from Amazon farmers to produce high quality chocolate products for international export. It closed due to the loss of several U.S. contracts in the economic downturn.
The Foundation is starting Yachana Technology, another for-profit company, to sell the Yachana E2. Roughly the size of three slices of bread stacked together, the Yachana E2 is a computer designed for the humid, open-air environment of the High School's computer lab. It is portable and consumes little energy, which makes it ideal for other schools and communities in rural areas.
The Foundation has also become an incubator for a myriad of base-of-the-pyramid micro-enterprises that address the challenges of life in the rainforest. These projects include the assembly and sale of water filters, silk-screening t-shirts, developing a student bank, and partnering with a pharmaceutical company to develop anti-diarrheic medication. Most recently, the students are learning to produce and market the Yachana Rainforest Unity Bracelet, made of seeds found in the rainforest.
The Foundation operates in an environment very different from our own here in Ithaca. However, I discovered that the concepts and skills I learned in my core classes and in the S.G.E. Immersion gave me a powerful toolkit to draw from when analyzing the challenges the Foundation faces in achieving a financially sustainable model. As I slowly made my way down the steep and muddy hill with Leidi's help, I was excited by what the next three years will hold for her. I also felt an immense gratification that what I have learned within the walls of Sage Hall had contributed to making the Foundation stronger, thereby making it easier for Leidi and her classmates to build a better future for themselves.
Douglas McMeekin, Executive Director of Yachana Foundation, will be visiting Cornell University for the Net Impact Conference to host a case study on the Yachana Foundation in November 2009.
I traveled to Ecuador as a 2009 Center for Sustainable Global Enterprise Fellow to work with the Yachana Foundation ("the Foundation") on developing a strategic plan for this unique for-profit / non-profit hybrid organization. The Foundation was established in 1991 by Douglas McMeekin, a Kentucky business man who moved to Ecuador in 1986. "Yachana" is an indigenous Kichua word that means "a place for learning." True to its name, the Foundation is committed to improving the lives of the indigenous and mestizo populations of the Amazon through education and opportunity creation. In 2008, McMeekin was selected as an Ashoka Fellow, a distinguished position as a leading social entrepreneur.
Today, the Foundation focuses on running the Yachana Technical High School ("the High School"), a boarding school covering the equivalent of grades ten through twelve of the U.S. school system. Designed to make education accessible to kids from the Amazon, the High School is structured differently from traditional Ecuadorian high schools. Because of this, prospective students are required to attend a week-long orientation, during which they shadow current students in everything they do. Leidi, along with the other nineteen kids on our hike, was visiting the High School for this orientation.
For kids like Leidi, obtaining an education is a challenge for several reasons. Their families have to cover not only the tuition and board at the school, but also the opportunity costs of losing their kids' help on the family farm while they are at school. In addition, the traditional Ecuadorian education system teaches purely academic subjects through rote memorization, which does little to prepare students for the job market. As a result, many students do not see the value in secondary education and drop out before completing it.
Established in 2005, the Yachana Technical High School is structured to tackle these problems. Located in the Amazon three hours by motorized canoe from the nearest city, the High School runs on a rotational twenty one-day structure. Students alternate between spending three weeks at home and three weeks at school. Subjects taught include agronomy, animal husbandry, micro-enterprise, eco-tourism, conservation, English, and basic computer skills. The High School encourages its students to "live their learning" by managing an organic farm that provides 40% of the school's food. The High School also encourages students to bring their learning home to help their family farms achieve better results. To make the school more financially palatable, the Foundation heavily subsidizes the tuition. Although it costs approximately $1,800 per year to educate one child, the annual tuition is set at $120 per student.
As of 2009, the High School has served 150 students, 80% of whom are indigenous. The students represent five provinces and four ethnic groups. Two classes have graduated. Some graduates have returned home to work in their communities while others have stayed to work at Yachana Lodge. Still others have come to the U.S. for further study in English. The Foundation is poised to begin building the Yachana Technical Institute, a two-year technical college, in response to graduates' desire for a higher learning program based on the same practical education model.
To finance the difference between the cost and the tuition, the Foundation has been experimenting with a for-profit / non-profit business model. While the majority of operating expenses are provided for by grants and donations, the Foundation also generates income from various for-profit ventures. The largest is the Yachana Lodge ("the Lodge"), a geotourism destination within walking distance of the High School. Winner of the 2008 Ashoka and National Geographic Geotourism Challenge, the Lodge gives visitors an opportunity to not only explore the rainforest but also learn about the lives of the indigenous communities. The Lodge has a deep symbiotic relationship with the high school. It offers a training ground for students to practice skills learned in their eco-tourism class in positions such as nature guide and food server. Interaction with guests gives students deeper engagement with the outside world. In return, the school offers guests a window into the lives and cultures of the students. In addition, the school's organic farm provides food for the Lodge.
From 2000 to 2009, the Foundation owned and operated Yachana Gourmet, a Fair Trade company that bought cacao from Amazon farmers to produce high quality chocolate products for international export. It closed due to the loss of several U.S. contracts in the economic downturn.
The Foundation is starting Yachana Technology, another for-profit company, to sell the Yachana E2. Roughly the size of three slices of bread stacked together, the Yachana E2 is a computer designed for the humid, open-air environment of the High School's computer lab. It is portable and consumes little energy, which makes it ideal for other schools and communities in rural areas.
The Foundation has also become an incubator for a myriad of base-of-the-pyramid micro-enterprises that address the challenges of life in the rainforest. These projects include the assembly and sale of water filters, silk-screening t-shirts, developing a student bank, and partnering with a pharmaceutical company to develop anti-diarrheic medication. Most recently, the students are learning to produce and market the Yachana Rainforest Unity Bracelet, made of seeds found in the rainforest.
The Foundation operates in an environment very different from our own here in Ithaca. However, I discovered that the concepts and skills I learned in my core classes and in the S.G.E. Immersion gave me a powerful toolkit to draw from when analyzing the challenges the Foundation faces in achieving a financially sustainable model. As I slowly made my way down the steep and muddy hill with Leidi's help, I was excited by what the next three years will hold for her. I also felt an immense gratification that what I have learned within the walls of Sage Hall had contributed to making the Foundation stronger, thereby making it easier for Leidi and her classmates to build a better future for themselves.
Douglas McMeekin, Executive Director of Yachana Foundation, will be visiting Cornell University for the Net Impact Conference to host a case study on the Yachana Foundation in November 2009.
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