There were two milestones I needed to achieve in order to complete my MBA — a new venture capstone project and a study abroad trip to compare and contrast cultures, business practices, and management styles.
In the spring semester of 2012, I enrolled in a six-week course entitled Engaging Diaspora Communities for International Business and Development. It was taught by Dr. Liesl Riddle, the associate dean of GW’s School of Business who has written extensively about diasporas and international entrepreneurship.
The course studied the diaspora communities in the US and abroad and their motivations for sending remittances to their home countries to spur growth and prosperity. A vast majority of the diaspora who return to Ethiopia are starting businesses and creating jobs. The class culminated with a week-long trip to Ethiopia to take what we learned and apply it firsthand.
There are an estimated 2.5 million Ethiopians living outside of Ethiopia. Many of them live in Washington, DC, so this particular diaspora was the perfect one to focus on.
“I want you all to contemplate what you expect Ethiopia to be like, compared to what we observed once we are actually in the country,” said Dean Riddle.
The GWU MBA class departed from Dulles excited about the adventures ahead. When they arrived at Addis Ababa 14 hours later, they were sleep-deprived and jet-lagged but enlivened nonetheless. Situated in the Horn of Africa, Ethiopia is a rugged, landlocked country and the cradle of humanity where Homo Sapiens first walked on two legs. It is the “Land of Origins”…of humanity, language, and of course one of life’s greatest pleasures – coffee arabica.
Since it was too early to check into our suites, Dean Riddle arranged for us to do some sightseeing. Our first stop was the Holy Trinity Cathedral, a product of the colonial period imbued with rich history and majestic architecture.
Many tourists who visit Washington, DC yearn to visit the Smithsonian Natural History Museum to ogle at the Hope Diamond. Likewise, an obligatory stop in Addis Ababa is the National Museum of Ethiopia to admire the Lucy fossil. She is 3.2 million years old, and the most famous early human ancestor because she walked upright. Unfortunately, the bones we saw were not the real Lucy, but plaster replicas. The original skeleton is displayed at the Cleveland Museum of Natural History. Ironically, it was offered to the Smithsonian in D.C., but turned down due to a resolution that early human fossils should be stored in the country of origin and to make displays in other countries with fossil replicas. It’s like traveling 7,000 miles to meet a fairy tale luminary, only to find out she’s half the world away on a sabbatical. But real Lucy or not, we were ready to do some slumbering as we finally headed to the hotel.
On the way to the Ramada we were greeted by the impressive stone monument of the Lion of Judah roaring over the city, a crown jewel of the infamous Haile Selassie.
Finally, at the lodge, I took a long shower and squeezed in a power nap, but by nightfall, we had to gather up for our first guest speaker – Addis Alemayehou, a serial entrepreneur who returned to his roots and has become a household name in Addis. He founded 251 Communications which has grown into one of the leading PR and communication firms in the country.
“I started my entrepreneurship endeavor here when the war between Ethiopia and Eritrea was just coming to an end and the economy at the time was in shambles,” Addis said. “I lost my iPod and missed having my playlist with all my favorite songs, and realized that there were many people who also enjoyed Western music. So I started the first English Speaking FM Radio station in Addis. A good business is always one that finds a need in society and fills that void.”
“Are there lots of opportunities here for startups?” my classmate, Marilu Ortega asked.
“Business in Ethiopia flourishes out of sheer need. If you were to spend a week in this country, carrying a notepad and writing down everything you wished you had but didn’t, you would finish the week with at least 35 promising ideas.
“How is the labor market here?” Erin Dahan asked.
“Steadily improving every year. Wages are low and there’s lots of talent here. Foreigners are investing and diasporans are returning and creating millions of jobs every year.”
The next day, we met one of those diasporans who had contributed enormously to the job market. Daniel Gad immigrated to the US after school in search of better career opportunities. After serving as an executive for AT&T for 20 years and building a nest egg, he decided to return home. When he met with the Chamber of Commerce to see where he should invest, they steered him to the field of agriculture. Daniel deep-dived in the industry and discovered that flowers are a multi-billion dollar export business. He then created a 28-hectare rose farm called Metrolux Flowers which he successfully exited. He now manages and operates Omega Farms, a leading vegetable production farm that produces and sells high-value vegetables to the EU. He is currently collaborating with PepsiCo on a partnership called EthioPEA aimed at chickpea production which would hire over 10,000 farmers. Daniel Gad is undoubted “mining gold from the dirt.”
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One industry that is facing a difficult time getting diasporans to return is the medical field.
“There are more Ethiopian doctors working in Washington, DC than in Ethiopia,” said Dr. Asfaw Atnafu, a professor of radiology at Addis Ababa University and the Head of Telemedicine at the Black Lion Hospital
One issue that Dean Riddle taught us in class is the concept of “brain drain”. In Ethiopia, many students leave the country to study medicine, but the vast majority do not return. Dr. Atnafu who studied medicine abroad was given a very lucrative offer to practice medicine in the UK. It seemed obvious for him to accept it. But one day, his mentor saved a very well-known British official who was suffering from a severe brain injury. The surgery was such a success that he was interviewed by the BBC. They asked him why he was returning to his homeland. The doctor said that Ethiopia would be safer now because they would now have one neurosurgeon. That one sentence changed Dr. Atnafu’s perspective, so he decided also to return.
Ethiopia is one of the fastest-growing countries in Africa with more than 104 million people. The country has made significant health care gains lately, such as lowering infant mortality, but more work needs to be done — particularly in rural areas. Healthcare, something that many Americans take for granted is a precious resource in many Third World countries and needs to be drastically improved and will be key to boosting economic growth.
Dr. Atnafu was not focused as much on remittances as he was on the social and educational aspects that diasporans can have on Ethiopia. That was why he’s big on telemedicine. Much of the engagement he facilitated was through knowledge sharing and training conducted virtually. In addition to receiving input from diasporans abroad, the medical community in Ethiopia can contribute to the medical dialogue by sharing their own experiences.
I wish my former boss, Admiral Robinson had an opportunity to meet with Dr. Atnafu. As the Surgeon General, responsible for seeing healthcare for the Navy and Marine Corps throughout the world, he was a big proponent of telemedicine and would have loved sharing information with Ethiopia on how to make healthcare available to everyone.
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We also met with Dan Rosenthal, the Commercial Officer at the U.S. Embassy. Ethiopia is a state-run economy and with the government overseeing the development, there is a lot of red tape. Thankfully, the country is starting to privatize and is looking for foreign investors to improve the quality of life for Ethiopians.
“The five sectors that are the most important for the future are Telecommunication, Agriculture, Manufacturing, and Power. These industries will create the maximum number of jobs leading the country to a dynamic future.”
“What are some of the major draws for international investors?” I asked.
“Duty-free imports of capital equipment, tax exemptions, cheap electricity, a thriving local airline with a large international footprint, and duty-free access to the US market through the African Growth and Opportunity Act. But probably the most attractive is low wages — the country wants to keep its wages low to attract investment for its manufacturing industry.”
“But low wages will barely lift workers out of poverty, and once workers gain skills, they will leave their jobs to seek higher-paying jobs, resulting in high attrition and higher training costs.”
The field trip wasn’t all meetings and business attire. We also went to enjoy the food and culture. And Dean Riddle recommended we visit the 2000 Habesha Cultural Restaurant. At first glance, the restaurant offering a buffet of traditional food and a stage show of dancing and singing looked like another tourist trap. But you cannot judge a venue by its clientele.
We loaded up with large platters of injera and wot and sat up front to enjoy the festive performances. The veggie-friendly dishes were anything but boring. The healthy portions included ruby beets, lentils, salad, carrots, green beans, and chickpeas and were flavored with garlic, paprika, and rosemary. After a few glasses of honey wine and bottles of St George beer, a couple of brave souls sauntered on stage and performed the Eskita (traditional dance moving the shoulders).
The next day, Dean Riddle and several of my classmates visited the Boston Day Spa nearby. They had a relaxing time to refresh and detox until one or two of them accidentally imbibed on the tap water that was served to them and immediately realized they weren’t in Boston USA. Ethiopia has made impressive progress over the past 10 years on improving water quality, but the water supply is still very contaminated and should not be drunk. Needless to say, a couple of them caught gastroenteritis and had to rest at the hotel to recuperate.
At this trailblazing spa, we got to meet with Tadiwos Belete, a diasporan who trained as a hairstylist and attended cosmetology school in Boston. When the Derg regime overthrew the Ethiopian monarchy in 1974 and established a brutal dictatorship, Tadiwos, at the age of 15 decided to flee on his own to Sudan. There he was even paid by farmers to scare off birds feeding on crops. After a few years of roaming about, he applied for refugee status in the U.S. and moved to Boston where he worked odd jobs until he decided to become a hairstylist.
After saving money, Tadiwos wanted to open up a salon in the city’s poshest neighborhood, but nobody wanted to rent to an unestablished immigrant. He decided to reach out to the owner of a building on Newbury St by inviting him for dinner at a nearby Ethiopian restaurant to get acquainted. The owner was sold by his negotiating skills, and in 1998, Tadiwos opened up his first hair salon called Konjo (beautiful in Amharic).
It wasn’t long before Tadiwos started to feel a longing to return to his homeland. He developed the idea of starting a luxury spa, hair salon, and hairdresser training school in Addis Ababa. But he didn’t have the funding. He asked nearly every customer who got a haircut from him to partner with him and invest in his country. After asking nearly a thousand people, one Taiwanese woman reluctantly agreed to come in as a silent investor. Tadiwos built an office block on crumbling, dilapidated Africa St, where many had not dared to set foot. His relatives thought he was crazy, but he wouldn’t be deterred.
Nine years later, business is through the roof, and his brilliant idea has spurred dozens of other spas to sprout all over the city. Tadiwos has also embarked on a development boom, opening up a restaurant and a wine bar downtown along with two luxury resorts a couple of hours from the hub. In all, he employs over 1,500 people spurring the economy. We had the opportunity to visit Tadiowos’ Kuriftu Resort, a 28-room tourist retreat in Bahir Dar, at the source of the Blue Nile river. It’s an amazing place with great food, hookah, and a splendid lake where you can go on a relaxing boat ride. And like Boston Spa, they have a massage, steam, and sauna to top off a very relaxing retreat from the city. Just remember not to drink the water.
On the way back to the city, we stopped at the legendary Tiya Stelae, an archaeological site containing 36 enigmatic monuments. Each obelisk-shaped stone is engraved with primitive, clear images of swords, shapes, and figurines. To date, no one has been able to determine the age or the purpose of these carvings. One reason why they call Ethiopia a “Land of Mystery.”
Finally, we got to visit the Commodities Exchange, established just four years prior. The country’s two major goods exports are not surprisingly coffee (29%) and cut flowers (14%).
Ethiopia is also a land of rich opportunities for investors, from all over the world. That is why it is projected to be Africa’s fastest-growing economy, and perhaps one of the fastest globally. Labor is fairly inexpensive and highly skilled and the country has made huge investments in infrastructure and manufacturing. The government is making reforms to unleash the private sector and has wholeheartedly embraced the diaspora for impactful development projects. Returning diaspora also share invaluable skills, education, and experiences they acquired from the West. In order for the motherland to optimize development and job growth, she must continue to forge lasting, meaningful ties with this salient community, translating into sustained, measured growth in the years ahead.
But the road to investment is a rocky one. Diasporans are facing a huge information gap in the current market and steep odds that they will reach their lofty goals. That’s why it’s highly imperative that they conduct proper research and fully understand the industry and the market in which they are operating in. They need to be savvy innovators and shrewd negotiators in a volatile and intransigent market. What I found noteworthy was the resourcefulness and resilience of the diaspora community. Through grit and resilience, many persevered and ultimately made a significant difference for their country and citizens.
On the final day of our journey, I sat down with my friends to discuss what we learned.
Rasheida Knight was really smitten with Addis Alemayehou. Addis has been able to achieve massive success because he was innovative. Most people who lose an item of value like an iPod would regard it as a setback. Addis viewed it as an opportunity to fill a void. He reflected on how important his playlist of Western music was to him and realized that there were many Ethiopians that felt the same way. He conducted a target market analysis to understand the size and scope of the audience and researched what was needed to launch the first private English-speaking radio station, Afro-FM. He not only tried to understand how people work, but he also wanted to understand how things work. And in so doing, he documented everything.
“If you were to spend a week in Ethiopia and write down everything you wished you had but didn’t, you would come up with tons of innovative ideas.”
Marilu Ortega enjoyed her time at the spa and was thus impressed with the innovativeness of Tadiwos Belete who thoroughly researched the local market and felt that a day spa business could thrive there. People thought he was crazy, but he understood the potential customer base and was confident that the salon would be a huge success.
But Tadiwos didn’t have the funds or resources to make all this happen. He was an effective negotiator beginning in his Boston, MA. days when he skillfully convinced a building owner to lease him space to open his first hair salon to when he convinced one of his customers to invest in his business venture abroad. Without his ability to listen, communicate and persuade, Boston Day Spa would never have been built.
Erin Dahan was impressed with Tadiwos’ resourcefulness. At the age of 15 and living in a Sudanese refugee camp, he was able to survive and find a way to show his usefulness to farmers and work with the Catholic Church to immigrate to the U.S. He lived in Boston for 20 years and through resourcefulness and grit, managed to save money and learn an important skill that led him to build his luxury spa business franchise.
Brady Shannon also enjoyed hearing about the resourcefulness of Daniel Gad. After living in the U.S. for 20 years, he was shocked when the Chamber of Commerce recommended that he invest in flowers. To be successful in agriculture one has to be highly resourceful. For one, the country did not have access to modern farming equipment. They still used pitchforks and plowed with donkeys. Daniel eventually sold MetroLux Flowers and started a new business in horticulture called Omega Farms. He did a lot of research and observed how his farmers harvested chickpeas. He then realized that by being more resourceful and making small improvements in their handling processes, his farmers would be able to increase production by 30%.
“I like to use the analogy of gold in the dirt,” said Daniel Gad. Ethiopia has a lot of dirt. The key is to find out how to get gold out of it.”
Marilu sympathized with the huge healthcare challenges the country faces. “Their resourcefulness in utilizing telemedicine is both novel and remarkable,” she said. “Dr. Atnafu has made huge sacrifices and has done a remarkable job.”
All the entrepreneurs we met, made bold decisions and took huge steps to start their businesses in a very risky and volatile environment. There was a huge information gap, and they faced steep odds against reaching their lofty goals. When faced with challenges, some of them had to take a step back or make a drastic course change, but they always kept their eyes focused on their goal and navigated towards it.
Even 10 years later, I remain inspired by the group’s resourcefulness, their deep understanding of the current market, their ability to broker and negotiate, their willingness to adopt innovation, and their courage to take the next step.
