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HBS Entrepreneurs Building Houses for the Poor

“Juan Pablo, imagine these poor people living in shacks with no water and electricity, having a decent home that they can grow in time. My dream is to provide a home to every Mexican who needs it.” That’s what my father told me when we were driving to our retreat home in Valle de Bravo, M‚xico.

The scene was full of self-constructed joints of wood, iron sheets and cardboard. The idea was very ambitious, but being a busy banker, he did not have enough time to fulfill it. He never thought that his son would decide to form a team and enter the 2001 HBS Business Plan Contest with his same dream. He never thought that the team would decide to reject their juicy offers from Telef¢nica, Siebel and McKinsey to make the new venture a reality.

“Form a good team, choose a good advisor and business will come.” This is a concept that I solidified in my Starting New Ventures and Entrepreneurial Management classes. At first, I invited two HBS friends. Knowing that the capacity aspect was not an issue to be worried about, the only question that I asked myself before inviting anyone was: Who do I trust?

Being at a place like HBS, finding partners was very easy. I invited one of my best friends in HBS, who is one of the most intelligent and valuable human beings I have ever met. He is also an architect and has a master in urban development; the project was a perfect fit for him. I also invited Gerardo Ruiz Maza, a good friend that I knew before HBS. I knew that he was an intelligent, trustworthy and a perseverant individual that could not rest before reaching his objectives. Fortunately enough Modulo became one of his objectives.

After two weeks of research, I spoke about the project to Salomon Chertorivski, my best friend at the Kennedy School of Government. He was very motivated with the project and gave me excellent advice on strategic aspects. After consulting with my two partners, we decided to make him the final piece of our team. He is a natural leader, his social awareness and motivation was crucial for the team when deciding to make the plan a reality.

“El que a buen  rbol se arrima, buena sombra lo acobija,” says a Mexican proverb that translates, “úHe who is close to a leafy tree, will have a nice shelter.” This is what happened when Myra Hart decided to be our advisor. Her experience in forming new ventures like Staples, her human quality, clear mind and focus made her the perfect shelter under which the plan could be developed. My brother Francisco was also a very important piece that provided us information and advice on the industry. His support as the chairman of the board of a fiber cement company in Mexico that provides roofs to the low-income housing industry was strategic for our plan.

The major force of motivation came from our performance during Super Saturday-the big day toward which we had been working. The day in which 14 judges would evaluate our work and define if it had potential. That was a particularly exciting and enriching experience that could only have happened at HBS. That same day, Gerardo and I were also organizing the Latin American conference. At the same time that I was waiting for a verdict on the plan, I had to host Ana Patricia Bot¡n, one of the most important and prominent businesswomen in Europe and Ibero America.
The news came three hours after the presentation-we were one of the four teams that had passed to the second round. We had to make another presentation that same day and wait almost a month to know who the winner was. When the decision day came, we were anxious about the final resolution. I received a call in the morning from Margot Dushin from the Social Enterprise group. She told me that “Eye Glasses” was the winner. I felt very sad, but suddenly I heard something else: “You were the only runner up, the judges really liked the project and we have decided to have a runner up.” That was music to my ears. From then on, the team has been highly energized. Six months have passed from that day, and the energy has been nourished by hard work and significant achievements that mark a great beginning for our business.

MODULO started operations in Mexico City on July 2, 2001. Flexibility, patience and tolerance have been the key for our startup success. Our initial strategy has changed dramatically; but our main objective remains firm on “building houses for the poor.” It’s tough to realize that the plan we thought of and developed in a Spangler room was very different from what reality demands.

As of today we have had two major accomplishments. We have built a model home in a parking lot and two houses in a small county called Rayon. The parking lot owner is the most important federal housing institution in the country; this is the first time that they have allowed a developer to build a house in their backyard. The two houses in Rayon are the model homes for a 100-house development that will start in January 2002.
This is how a group of four young entrepreneurs, one step at a time, one house at a time, growing in a planned way is fulfilling the dream of building decent houses for the poor in developing countries.

November 19, 2001
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