Why struggle to get a job in this damaged economy if you can be fortunate enough to have the opportunity to create your own? The HBS business plan contest was a great opportunity for me to validate a business idea, create a company of my own and also have fun in the process. Let me tell you about my experience.
Once I got accepted into the Harvard MBA program I had to solve a problem-how to pay for it? I quickly learned about the different options for HBS students and applied for an HBS endowment and a Citiassist loan. It was hard for me to get an education loan in Mexico, but it is much harder for the low-income population in Mexico to have access to any type of credit at all. This indicated that there was a great opportunity, and I felt compelled to do something about it.
I then teamed up with two fellow Mexican HBS colleagues to explore the possibility of making credit available for Mexico’s low-income population. We then proceeded to explore the idea of the HBS business plan contest and found out that we were getting into a very exciting and competitive area of the HBS experience. We were also excited to discover that the contest has a social enterprise track, which was more specific to our idea and would make everything more focused.
We received support from the social enterprise group at HBS, including financial aid, and more importantly, time, guidance and support from key faculty. I find it hard to think of a better moment in life to explore a business than while at HBS. You will find the time, resources and support to advance twice as fast as if you were doing it anywhere else. Believe me, once you go back to the real world, it’s not that easy to find the time for a brainstorming session of possible business plan ideas with your friends and then get advice from industry experts for free. Besides, you’ll want to leave all the time after graduation for the most important part of any business plan: execution.
By the time we reached Super Saturday, we had a very strong business plan that we presented to the judges. We made it all the way to the semi-finals and some judges showed a lot of enthusiasm about the project, even inviting us to present to their private equity firms.
By graduation, we had already advanced so much, having validated our plan through our research. We proved that the micro-credit industry in Mexico has a huge market niche that could greatly help the poor and at the same time become a profitable business. By that time, however, it was decision time for my team, and I lost both of my partners to the corporate world. Even though I had other options and was afraid to continue on my own, I decided to go ahead with the project.
Back in Mexico I learned that the government had a plan to fund micro-finance institutions with the intention to help strengthen micro-enterprises and low-income entrepreneurs in Mexico. This was an opportunity I had to explore, but I still was lacking a partner in my venture. Fortunately, Antonio Vivanco (HBS ’00), a very good friend from college and an experienced entrepreneur, joined me in the project.
Since then, Antonio and I have conducted polls and market analyses to narrow the type of financial services we should offer. We concluded that financing micro-enterprises (such as corner stores) is a very good way to get started, since the store owners generally use all their profits just to support their households, and have no other sources of cash to finance growth.
Micro-enterprise job creation accounts for almost 50% of Mexico’s labor force, and only 3% of these firms have access to formal credit (vs. 51% in the US).
The task at hand is very challenging, since most of these people do not know how to use credit productively. We also need to have a minimum of one year of experience to get financing from the government. As government funds become available to this sector, more professional and sophisticated management will be needed in order for them to be able to grow while at the same control risk exposure.
Overall, just a few months after graduation, Antonio and I are starting to execute our business plan with the support of HBS advisors. The future looks bright, and the opportunity is enormous. It is just a matter of time for us to make a big difference in our country. And it all started at HBS.