Acumen Fund Blog

Typical scenery in Bihar

A few weeks ago, I traveled to Patna to visit Husk Power, an Acumen Fund investee, with Acumen Fund’s Energy Portfolio Manager Karthik Chandrasekar. Husk Power is in the business of setting up mini power plants in Bihar, one of the poorer and more populous states along the Indian rice belt. I’d been spending the summer working on the energy portfolio and was excited to meet the Husk entrepreneurs. These were the guys who figured out how to roll out mini electric utilities in a state where close to 85% of the population lived in rural villages. It was a good trip, and in retrospect, I think I learned a few new (and useful) things.

One day, we were riding in a car with Gyanesh Pandey, CEO of Husk Power, when a very bored-looking policeman pulled us over and asked us to show him our vehicle registration papers. Our driver gave him our papers, which were photocopies, because in India, nobody keeps originals in their cars. The officer wasn’t satisfied. He didn’t want photocopies. He wanted money: 9,000 rupees in cash. If we paid him, he’d let us go, and if we didn’t, well, we just never asked. Unsure of what to do, we sat and waited in the stifling heat of the car. Then, for the next half hour, we watched Gyanesh and the policeman, in between long, drawn-out pauses, have a go. From what I could piece together (given my limited understanding of Hindi and the general confusion I was feeling at the time), the dialog went something like this (I think):

• Policeman: I want my money.
• Gyanesh: I got no money, but I’m happy to drive to an ATM with you and get you some money, but you need to write me an official receipt.
• Policeman: I’m not driving anywhere. But I like you, so I’ll give you a discount. I want some money.
• Gyanesh: On any other day, I’d pay you. But today, I’m with my Chinese business associate [then he points at me!] and it would be very shameful if he saw me paying you money. Think about how bad this would look!
• Policeman: Oh snap. [long pause]  Fine, just go.

In the aftermath, I asked Gyanesh and Karthik to explain their police strategies to me. They agreed that when dealing with corrupt law enforcement officers in India, one should never give in, but must be prepared to spend a lot of time hanging around. If one simply hangs around long enough, then sooner or later, the policeman will realize that his time would be better spent extracting income elsewhere. He was, after all, a businessman, and businessmen have their own businesses to run.

At Acumen Fund, there is a tradition where team members are sometimes asked to share ‘Aha!’ moments, brief stories about the things that stood out or inspired us over the past week. So when we returned to Hyderabad, I told my policeman story during one of our weekly staff meetings. It was good to hear the reactions of the team. One person commented on how Gyanesh seemed completely prepared in advance to be patient in such a difficult situation. He was street smart, but more importantly, made it a point never to cave in to the corrupt demands of the police officer. Another person pointed out that ‘hanging around’ is what so many of our entrepreneurs have to do in order to avoid paying bribes. As a result, investors needed to be patient and expect results over the longer term. At least one other person swore that ‘hanging around’ also worked on policemen in Tamil Nadu.

For me, the experience highlighted the unexpected challenges of operating in rural parts of India.

Ken Lee is a student at Columbia University’s School of International and Public Affairs pursuing his Master’s in International Affairs.  This summer, he was working on the energy portfolio in Acumen Fund’s India office.

The Summer Spotlight series features posts by Acumen Fund Summer Associates from around the world.

In 2006 I visited Kenya to look for water and sanitation deals, back when I was managing the water portfolio. It was on this trip that I first saw David Kuria’s prototype for pay toilets in the slums, which he eventually turned into Ecotact. David took me to a community he had been working with for over a year and introduced me to a community leader who carried himself as though he were the mayor of the village. He was dapper in his mustard polyester dress shirt and pants, and he proudly showed me all the investments his community had made in improving water and health services with revenues from a pay toilet that David Kuria had built with them. He showed me this water stand, pictured above, as well as a small clinic, to which they had added a maternity ward and HIV/AIDS diagnostic center. The sense of ownership and pride that he and members of the community felt was palpable.

I remember wanting to get a picture of him that would somehow highlight the impact of true leadership on a community, but he was always moving so fast, and wasn’t the type of person to pose in front of something and take credit for it. Everything that this community had built had come from revenues they generated from their own pay toilet, and from the work of the community to build the things they needed. I managed to get this photo of him at the water stand, but you can almost see the reluctance on his face. At the same time, I think you can see his seriousness and determination as someone who is committed to improving a community facing tremendous challenges. He is a local shopkeeper, but he is also a community leader, a role model, a reason to believe that what people want more than anything is to solve their own problems and, if possible, help others in need.

Yasmina Zaidman is the Director of Communications at Acumen Fund.

Villagers try to catch trees floating in the flooded Nelum river in Muzaffarabad, the capital of Pakistani Kashmir on Friday, July 30, 2010. (AP Photo/Aftab Ahmed)

It was July 25th, and I was on my way back home to Lower Dir in the Swat valley. Lush green rice fields and shiny clean newly constructed restaurants and huts along the right bank of River Swat were an enriching and peaceful sight. After a challenging five years period of terrorism, militancy, and consequent displacement of a massive number of villagers, I was pleasantly surprised to see reconstruction almost completed.

It’s hard to imagine now that was only three weeks ago.

It rained for the next three days continuously and heavily. The beautiful dense forests and high mountains and countless streams of my hometown could not stand it – the streams and rivers overflowed, flooded, and by day three we started seeing dead bodies, vehicles, shelters, broken trees, home appliances and so many other things floating downstream. The Swat River had washed out the major bridge connecting Lower Dir, Upper Dir and Chitral with rest of the country and – as I later found out – twenty four other such bridges in its path till the River Kabul at Nowshera. Flood water had caused the river to double in size, burst its banks and wash away everything in its path. With very little food, fuel and amenities in stock, and I was one of three million people of three districts remained stranded for next five days.

I cannot forget a crowd of what must have been tens of thousands of people on both side of the river all standing in long queues, children crying, veiled women struggling with their ‘parda’ in the middle of so many men and the elderly being pushed hard, waiting for hours in the scorching heat. I can’t forget a baby unconscious in the hands of its mother running madly for help in the crowd. It was chaos all the way- and those people are still isolated from the rest of the country.

A boy walks through flood destroyed homes on August 4, 2010 in Pabbi, near Nowshera, Pakistan. (Daniel Berehulak/Getty Images)

Fortunately enough, day six I received help from my brother who had arranged a special escort by the Pakistan Army. What initially felt like a relief and a privilege very soon became guilt – which only started increasing as I moved across the river, and climaxed at the moment I made it to the other side. Instead of relief, I felt awful for the unfortunate people left on the other side. However, my journey had not yet ended – I was stuck for the next two days, and eventually managed to reach Nowshera. Nowshera used to be a small city which stood cheerily on both side of River Kabul, and was now completely and totally flooded. The M-1 the motorway that runs between Islamabad and Peshawar had hundreds of thousands of internally displaced persons (IDPs) who had made it to this relatively high ground. Nothing was left on both side of the river and water had even entered into the city filling streets, houses and markets with water and mud all over. Conditions of the survivors were very poor, lying under open sky, empty handed with almost nothing to eat and drink.

Flooding is still occurring across the country, starting from in the northern Khyber Pakhtunkhwa where my home lies, and spreading down to Punjab, Sindh and now Baluchistan – all have been badly hit. Every day brings new reports of more villages inundated. Millions of people are affected, displaced and countless stranded. A third wave of flooding has started in the north and is expected to reach downstream in next few days. The scale of devastation is too enormous for my mind to imagine.

No doubt the situation is a test of our strength, our individual and collective faith, morality and humanity. However, in the words of someone else, what doesn’t kill us can only make us stronger. Though it is hard to hold optimism in this hour of dismay however, I feel some aspect of the catastrophe could be viewed positively as well. The aftermath of the flood is teaching us lesson to devise systems and strategies which could prevent and mitigate such catastrophes in future. Public opinion has now changed dramatically on construction of dams which were previously denied as being too controversial. And most of all, despite of all the differences that seem to divide us, we as a nation are united for a single cause now, working hand in hand to rebuild the lives of the millions who have lost everything in the face of the flood.

Muhammad Zahoor is a Class of 2010 Acumen Fund Fellow, currently working with FMIA in Pakistan.

“Develop a seamless web of deserved trust”—this was the expectation set in motion at the beginning of Acumen Fund’s Portfolio Gathering in May. When we brought the CEOs of our portfolio companies together for the first time in five years, the goal was to facilitate an environment of deep peer to peer exchange across the portfolio. In doing so, we developed a web of trust that extends beyond geographies and sectors, and we stretched our concept of the value that we, as investors, can bring to the companies in our Portfolio.

Back in 2005, 11 entrepreneurs, 7 Acumen staff from New York (our only office at the time), and 4 partners and advisors met in Bellagio.  Five short years later, the Acumen Fund family looks quite different—this time 30 entrepreneurs, 20 Acumen Fund staff (just from our Portfolio team) from 4 offices (New York, India, Pakistan, and Kenya), and 21 partners, advisors, and board members came together in Nairobi.  This photo—taken during a lighthearted moment during our visit to Jamii Bora, a recently exited housing investment in the outskirts of Nairobi—captures this truly global nature of our growing community.

As the residents of Kaputei Town welcomed the group, they literally connected us in a human chain of Americans, Indians, Pakistanis, Kenyans, South Africans, French, British, entrepreneurs, investors, newly established homeowners, advisors, donors, and board members.  While it admittedly felt goofy at first (and disorientingly similar to the popular Bar-Mitzvah dances of my 7th grade existence), we quickly set aside our feelings of awkwardness and embraced this joyful gesture of welcome from the Jamii Bora community. It wasn’t necessarily Jamii Bora’s intention, but I couldn’t help but notice that this cheerful welcome physically mirrored the sense of interconnection we were working to foster across our portfolio.

The Portfolio Gathering reminded us all of the wealth of knowledge that exists within our community and of the value that Acumen Fund can add simply by connecting them to each other. It can be so easy to think of our companies in isolated boxes, but this misses out on a massive opportunity. Acumen Fund is like a laboratory with each company producing unique lessons that can benefit the rest—it would be a shame if we neglected to create a platform for them to share with each other.  When I look at this photo, I am reminded of that.