Impact Engine – Part 2
VERBATIM by Loop Lonagan – Investor and man about town,
as told to John Jonelis
Loop Lonagan here at IMPACT ENGINE Investor Day. This is the new Chicago incubator fer companies that do well by doin’ good—and doin’ it profitably! Think of it—we’re gathered here to get richer by makin’ all them other poor slobs around the world prosper! This I like!
The keynote speaker is FK Day. (He calls hisself FK fer short.) And he tells us a story that knocks us outa our seats. This is a real unusual chain of events that speaks about the virtues of capitalism doing alotta good by helping folks raise their own well-being.
Here’s the shortlist:
- The story starts with SRAM that makes high-end bike parts.
- Then FK starts World Bicycle Relief—a not-fer-profit.
- That leads to Buffalo Bicycles—a self-sustaining company.
The Chase Auditorium’s packed with serious investors. Them’s the only kind they let in the place today and this hall seats over 500 of them rascals. They’s all squealin’ ‘n’ squirmin’ to get a piece o’ the action. Sheesh—I ain’t seen so much money in one room since I…well I ain’t s’posed to talk about that so lemme move on. I’m here to do summa that Impact Investing, just like da rest o’ these clowns. But first lemme get back to the keynote speaker
(Note to Editor—All that coffee I swilled down‘s got my eyes buggin’ out ‘n’ I feel a whole lot more coherent. I’m gonna give you the skinny on this thing. But I want you should cut me some slack—just in case I get something out o’ order.)
(Editor’s Note—Nobody’s perfect. I’ll print it just as you dictate it.)
Okay, so dis story starts after FK pioneers bicycle shifters ‘n’ brakes at SRAM. His stuff’s in high-end bikes AND in all the big international races. Even poor disgraced Lance Armstrong uses SRAM components so you gotta figure that FK knows a thing or two about bikes.
Hey—this is a Chicago company, okay? Don’t get no better ‘n’ that, right? Well actually it does as you’ll see in uno momento.
World Bicycle Relief
Remember that big tsunami in Indonesia? FK and his wife go there to lend a hand. They’re lookin’ for a better solution than the NGO relief organizations. So they asks people lotsa questions.
Turns out nobody can earn a living or make any economic progress ‘cause there’s no transportation. Everybody’s on foot. That ain’t too efficient. There’s kids spendin’ six hours a day walkin’ to school ‘n’ back. Mothers carryin’ groceries long distance. And get this—businesmen haulin’ their wares to market 5 or 10 miles on foot.
You think da rush hour here in Chicago eats into yer day? It’s nothin’ compared to this. This is no way to do business. This keeps folks in poverty.
FK’s a bike guy, so he shows up pre-loaded with the natural solution to the problem. He runs experiments and finds out alotta things. Turns out a bicycle can increase the income of a poor family in a big way. Looks like it’s the single best way to fight poverty in these primitive areas.
So he creates the not-fer-profit organization, World Bicycle Relief, which is a real big deal. They partner with WorldVision and alotta other organizations. They give out 24,400 bicycles in Indonesia.
FK starts a buncha 9-day trips to Zambia to fight HIV/AIDS and creates a special bike for it.
His folks first task is to assemble their bikes so’s they can get around. Their last task, before they leave, is to turn over their bikes to the villagers.
FK gives out 90,000 bicycles this way and learns a lot more about the problem.
By now he’s got three well-defined areas he wants to impact:
- Economic development
I think education tugs at him strongest. Kids in these countries gotta travel a real long way to school and still have time to do chores not to mention homework. With bicycles, they can get to school more often. That builds up the whole culture by givin’ these people a future. Givin’ ’em hope. Summa these folks wanna be teachers, doctors, engineers. Somethin’ as simple as a bicycle can make that happen.
Lemme get you started with a terrific video. Have a look at it ‘n’ then I’ll tell you more.
Pretty good stuff, doncha think? Bottom line—bikes carry more weight farther and faster than shoes. Bikes get kids to school, people to clinics, and they get businessmen to markets!
FK tells the story of a dairy farmer in Zambia. With a bike, he can get to the co-op twice a day insteada just once.
That instantaneously doubles his income!
Summa these guys mount homemade cargo boxes on these bikes and use ‘em like trucks.
According to FK, the most powerful bike in the world is one in the hands of a mudder feedin’ her family or a fadder making a buck fer his family or a kid gettin’ an education to claw his way outa poverty. All o’ these takes transportation. And education is real important. You gotta learn readin’, ‘rightin’, and ‘rithmetic and how to speak yer language da right way or yer never gettin’ nowhere in dis here world.
Lemme go back to the hardware development phase. FK takes this jeep trip down them things called roads in Zambia. Whadaya think he sees? Busted bikes in the ditches ever’place he goes—every brand ‘n’ model on the planet. Says it looks like somthin’ outa The Andromeda Strain. (That’s a movie in case you fergot.)
These bikes come from well-meaning charities. But it’s all wasted. People in Zambia take to callin’ ‘em Chinese Junks. Off-the-shelf bikes is way too flimsy fer this kinda terrain.
So whadaya think the average lifespan is for yer typical off-the-shelf bike? 30 days! That’s it! And there’s no way to fix ‘em neither! Too many different brands. No parts. No mechanics.
FK figures what they need:
- Standardized bicycle
- Standardized parts
- Real, real rugged
- Trained mechanics
- Supply Chain
The Buffalo Bicycle is a rugged design like no other. It can withstand rough roads while carrying a load o’ trade goods to market.
Here’s a video of FK in Africa riding the roads with folks:
Charity’s a good thing. But how do ya make it self-sustaining? How do ya make it grow like a hockey stick? You turn it into a business. Business can be a helluvalot more powerful than an outstretched hand. A little capitalism can be good fer da soul and FK’s a capitalist at heart.
FK sells the Buffalo Bicycle to third-world businessmen at a profit. That makes the project self-sustaining. He trains and supplies mechanics. And that maintenance network is self-sustaining too. So far they got 124,754 bikes out there where they can do some good.
He shows us graphs ‘n’ charts. He’s gonna be building 100,000 bicycles in eight African-based supply chains in 2015. This program is scalable and sustainable.
Remember all that research I told you about? FK makes a key point about that. He learned everything he ever needed to know from the end user. We need to stay deeply in touch with these people. The answers almost always come from there.
And to me, the amazing thing is that he went and figured out da problem and da solution ‘n’ engineered such a wonderful outcome. He bootstrapped all o’ this starting with lotsa fund-raising drives like the annual Wrigley Field Road Tour which is a part of Chicago Cubs Charities.
Here’s a candid video of FK thanking his volunteers after a small fundraising drive–one of many:
Next up is a company called ThinkCERCA. Meanwhile, check out summa the other articles about Buffalo Bicycles below. Ω
Wrigley Field Road Tour
World Bicycle Relief on Wikipedia
Article in Forbes
BBC Article in TON
World Bicycle Relief website http://worldbicyclerelief.org
WBR on Facebook www.facebook.com/worldbicyclerelief
SRAM Corp. http://www.sram.com/
IMPACT ENGINE website www.TheImpactEngine.com
[ Photos and video courtesy of World Bicycle Relief ]
Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link . This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.
.Copyright © 2013 John Jonelis – All Rights Reserved