Anne Sromek is a third-year student in the EWMBA program at Haas, and one of 20 students enrolled in Seminars in International Business: South Africa during the Spring 2014 semester. Class instruction is led by Doy Charnsupharindr, Professor Mark Rittenberg, and Ingrid Gavshon. The 2-unit course is comprised of several pre-trip evening meetings at Berkeley, during which students explored South African history, business, political climate and culture through guest lecturers and selected readings. The students also spend one week abroad to solidify the lessons learned and connect with a country outside of their own.
This blog is assembled from the experiences and musings of the author for the purpose of showcasing the SIB experience for prospective students and future SIB participants.
On Thursday morning, we jumped a flight from Johannesburg to Cape Town. The direct flight takes about two hours, and I have to admit that it was refreshing to take a water bottle and wear my shoes through the checkpoints for domestic South African travel. As the plane was landing, we were treated to some of the most amazing views of mountains and ocean – already, Cape Town was making an impression on us. Our tour bus was waiting for us at Arrivals.
We began driving toward our first stop – Fundamo, a branch of Visa (it was acquired in 2010). Many of us were dressed in jeans due to our early morning flight from Johannesburg, but it seems that jeans are totally acceptable in the “Silicon Cape”. Hannes Van Rensburg welcomed us to Visa with an overview of Fundamo. Hannes began Fundamo in September 2000, in order to help relieve the poor areas of their reliance on cash transactions. It was interesting to hear how he saw that Africa’s disadvantaged population has more complex financial needs than anyone would initially imagine – they hide cash in mattresses, don’t have credit, and usually don’t have bank accounts. Naturally, cash money is subject to theft and these people lose up to 30% of their income due to loss. Thirty Percent!!!
The technology behind Fundamo piggy-backs upon the mobile phone phenomenon across Africa. Those who don’t have electricity or even running water have the ability to own a phone. To recharge the phone is another challenge – but most of the continent is connected nonetheless. Fundamo effectively used the technology of SIM cards and phone cameras to create encrypted, user-friendly applications that can be used to transfer money across mobile networks within Africa. Those on the receiving end of a transaction can walk in to any participating merchant to cash out and complete the transfer. The adoption of the application took approximately 2 years, before it spread like wildfire in Zambia. Even M-Pesa (from our previous day’s visit to Vodacom) used Fundamo’s model as a roadmap for their entrance in Kenya.
Its exponential adoption rate aside, Fundamo did not turn a profit until 2007, exactly seven years after its launch. Today, the company has over 200 million subscribers, a number that grows every day. The Fundamo footprint includes East Africa, West Africa, Pakistan and Bangladesh.
The best advice the Haas group got from Hannes is, “Don’t complain if the barista doesn’t get the foam correct on your cappuccino” – instead, we should dream big, change the world, and have faith that success will follow. I love this advice, and it truly is so reflective of the attitude of all of the successful entrepreneurs we’ve met thus far in South Africa. The glass is always half-full, despite obstacles that are encountered along the way.
With that healthy dose of confidence, the Haas students piled back into the tour bus for lunch at Stellenbosch, which is one of the major wine regions bordering Cape Town (the others being Franschhoek, Paarl, Constantia, Robertson, and Wellington). We visited Tokara winery specifically, and had lunch at their Deli Cat Essen. The views were beyond gorgeous, and we all enjoyed the outdoor setting after our plane ride earlier in the day.
EWMBA Students at Tokara Winery
We returned to Cape Town after lunch where we stopped in to the 15 on Orange Hotel to enjoy a networking event with professionals in technology who are involved in Silicon Cape initiatives. We were able to network with the event’s participants, enjoy some great jazz music and appetizers with like-minded businessmen and businesswomen.
After the networking event, we drove to our hotel in Bantry Bay, The Ambassador. At this point I think all of the Haas students were ready to move to Cape Town on a permanent basis, or at least seriously entertain the idea. The hotel is perched on a cliff, and the waves crash on the rocks just outside of the hotel’s pool deck. The sunset was gorgeous and I think I speak for the entire group when I say that we are so blessed to be a part of this journey together.