March 22nd, 2006

2006 Fellow Robert Maranga was featured in Red Herring magazine as one of six “Unselfish Technologists”.

• Unselfish Technologists
  Six social entrepreneurs bear witness to the fact that profit is not the only driver of innovation.
  December 26, 2005 Print Issue
• Do-Gooders: Robert Maranga
  The Kenyan-born entrepreneur is writing the software that will make micro-financial institutions more efficient and more accountable.
  December 26, 2005 Print Issue

Unselfish Technologists
Six social entrepreneurs bear witness to the fact that profit is not the only driver of innovation.

December 26, 2005 Print Issue

In writing about the technology business, Red Herring urges its reporters to “follow the money,” and track the investors, sellers, and buyers of products and services. While the confluence of innovation and financing has been the key ingredient in creating centers of technology like Silicon Valley, money is not the only reason that people invest years and thousands of dollars to create innovative products and services.

For the second year in a row, this magazine is highlighting several “do-gooders” who have harnessed their technological skills to their compassion to address some of the world’s most pressing problems. They aren’t household names like U2 singer Bono, a highly visible proponent of the campaign to eradicate poverty, or Microsoft chairman Bill Gates, who has endowed the Bill and Melinda Gates Foundation to the tune of $29 billion and tackled issues like AIDs in Africa and sudden infant death syndrome.

Instead, our do-gooders fit into less flashy categories: a veteran soldier, two technologists who rose from poverty, a professor of medicine, a military doctor, and the owner of a small business.

Lee Thorn helped bomb Laos during the Vietnam War and now works to improve living conditions there—most notably with a rugged, inexpensive personal computer he helped create.

Orlando Rincón Bonilla of Columbia and Kenyan Robert Maranga both grew up poor, but now use their success in the tech industry to help children out of poverty and to create software to help institutions that aid the poor.

Hamish Fraser, a medical professor at Harvard University, created a web-based record system that looks after chronically ill patients in Peru and Haiti—and that may be adopted in other developing countries.

Another doctor, Oviemo Ovadje of Nigeria, invented a device that recycles patients’ blood so they don’t need expensive, and sometimes dangerous, transfusions—though he’s struggled to make it available to the wider world.

And self-proclaimed “redneck” Mac Dearman did right by his Christian faith, using his small ISP business to help hurricane victims in Louisiana contact their loved ones.

Philanthropy That’s Profitable

These tales are admittedly heartwarming, but that doesn’t preclude their creators from seeking a profit. After all, they understand that a steady source of revenue is the best guarantee that their inventions will be self-sustaining.

There are examples of social entrepreneurs who have managed to eke out a profit. David Green’s Aurolab in India, for instance, sells intraocular lenses—a treatment for cataracts—at $4 a pop in India, compared to the $100 price tag for such lenses in the United States. Yet the nonprofit company boasts 52 percent profit margins, with sales of 600,000 units in 86 countries, and 7.5 percent of the sector’s global market share. “Profit and production capacity are utilized to fulfill social mission, which is making medical technology affordable and available to all,” says Mr. Green.

He also created Catalytic Health, a for-profit company that still focuses on social responsibility. Ben Cohen of Ben & Jerry’s ice cream, an informal advisor to Catalytic Health, says, “The key to sustainable capitalism is reasonable profits as opposed to maximizing profits…. What you need to do is combine the sensibility of the social enterprise with the form of a for-profit business.”

And social entrepreneurship can save money. “One hospitalized case of dengue fever costs one-fifth of Malaysia’s per capita gross national product,” says Donald Shepard, a health economist at Brandeis University’s Heller School for Social Policy and Management. Mr. Shepard, pleading for the development of a dengue vaccine, notes that such a vaccination would offset 87 percent of treatment costs in Southeast Asia and reduce the amount of money spent on insecticides to kill dengue-carrying mosquitoes.

Even C. Montgomery Burns, the millionaire villain of TV’s The Simpsons, has to face the fact that the poor represent “the fortune at the bottom of the pyramid.” The phrase coined by University of Michigan professor C.K. Prahalad says that the 4 billion people who live on less than $2 a day comprise the world’s biggest untapped pool of consumers and entrepreneurs.

Examining Things Holistically

And the poor can be muses for technology and business experts who want to serve them at modest profits. “When people get behind innovators, they will help bring about change” that will forever affect the world, says Michael MacHarge, the associate director of development and partnerships at One World Health, which takes to market drugs geared toward limited sales in developing countries—drugs deemed by other companies to lack great earnings potential.

Some of those who back social innovators could be doing so for the bragging rights and the possibility of leaving a legacy. To actually be a social entrepreneur is harder. “It takes a long time to cultivate people. If you’re extremely passionate, you still have to give people time to get their heads around it,” says Mr. MacHarge. He adds that in many cases, social entrepreneurs can only address a small piece of a much larger problem. “You have to look at it holistically,” he says. For example, people in Nairobi aren’t going to achieve the same degree of Internet connectivity overnight since infrastructure there isn’t solid. “But with ingenuity, you find resources do exist,” he says—whether it is running electricity only two hours a day or skipping land lines and going to wireless telephone services.

Meighan Stone, the communications director for ONE, the organization founded by Bono, is adamant that those who join the organization—which has worked to erase African debt, world hunger, and AIDS—do so purely out of good intentions. “Americans are very compassionate. When you talk to people, most of them say, ‘How can I help?’” says Ms. Stone. She points to the half-million people who signed ONE’s email urging U.S. President George W. Bush to champion debt relief for African nations, as well as a $1-per-day treatment for AIDS patients in poor countries that, she says, resulted in part from partnerships encouraged by ONE participants.

In the case of our do-gooders, they have taken their technological prowess, applied it to urgent problems, and made the world a slightly better place.

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Do-Gooders: Robert Maranga
The Kenyan-born entrepreneur is writing the software that will make micro-financial institutions more efficient and more accountable.

December 26, 2005 Print Issue

The last thing Robert Maranga’s father ever did was to flush out a mole burrowing in his tiny coffee farm in the Kisii Highlands of western Kenya. After he killed the mole, Mr. Maranga’s father walked back to the family’s mud-walled house and fell into a coma from which he never emerged.

His father’s death in 1995 changed things for Mr. Maranga, his mother, and his six siblings. A hard-working man with two wives and 15 children, Mr. Maranga’s father kept his two families in relative prosperity by tilling three acres of coffee and tea as well as teaching at the local elementary school. With her husband gone, Mr. Maranga’s mother turned to local money-lenders to hold her family together.

The small sums she raised to keep her children in school were Mr. Maranga’s first encounter with micro-lending. Knowing how important micro-lending was to his own story drives his work today: helping the industry by giving micro-credit institutions better software to manage their back offices.

It’s not simply about better bookkeeping. More accountability will lead to more money flowing to micro-financing institutions. “Not so many micro-finance institutions have received the benefits of technology,” says Mr. Maranga.

The Power of Micro-Financing

But millions of poor people have received the benefits of micro-financing. It’s estimated that there are somewhere between 8,000 and 10,000 micro-financing institutions in the world today. With loans of usually not more than $200 to small businesses, often run by women, micro-financing is touted as an effective and sustainable method of lifting people from destitution.

Success stories are numerous, and the numbers are promising. A 2003 World Bank study found that half of the poorest households in Bangladesh with access to micro-credit managed to rise above the poverty line. Opportunity International, a U.S.-based Christian micro-lender, reported default rates of less than 3 percent on over 675,000 loans.

Behind every story of a client who turned a tiny loan into a vehicle out of poverty is the usually untold story of the lenders themselves. In poor parts of the world, micro-lending data does not travel at the speed of light across fiber-optic cables. For the Women’s Economic Empowerment Consort in Kenya, for example, data travels at the speed of a Yamaha motorcycle navigating through Nairobi’s notoriously congested roads.

A WEEC lender carries a single ledger from client to client, keeping track of payments, loans, and savings. When the ledger returns to the main office, the rest of the data management process is equally low tech. Clerks enter the updates by hand into account books. Mr. Maranga remembers his first visit to the WEEC: “It was the simplest office I had ever seen.”

Until he became a fellow in Stanford University’s Digital Vision Fellowship Program in 2005, Mr. Maranga worked in what is likely one of Nairobi’s plusher offices. His expertise in back-office systems comes from working with Oracle’s financial software for Celtel, one of the largest mobile providers in Africa, which was recently purchased by MTC in Kuwait.

The Open-Source Solution

Mr. Maranga says his challenge now is to help craft an open-source software platform as flexible as the Oracle program he used at Celtel. The program will have to work with a wide range of organizations, some quite small. “The system should be able to adapt to running on a single PC or a server,” says Mr. Maranga.

One of the oldest and most advanced micro-lending institutions is the Grameen Foundation, which was started in Bangladesh in 1976. Grameen Foundation USA started the open-source software project Mr. Maranga is helping to develop.

“We are trying to create a virtuous cycle of distribution within the industry,” says James Dailey, technical project manager for the Grameen Foundation USA. Mr. Dailey says the ultimate goal is to hand the program over to a self-sustaining nonprofit. People on the ground will be able to use the program as a for-profit venture that will support local institutions.

For his part, Mr. Maranga, 30, is not sure what his next move will be after he returns to Kenya next year. He is thinking about business school. He knows he might still be working the family’s small plot of land in the Kisii Highlands had small loans his mother took on not made an education possible.

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