The team was crestfallen. The four students — from the U.S., Kenya, India, and the Democratic Republic of Congo — had just pitched their idea for a social enterprise startup that fell flat. Competing against five other teams at Earlham College, a private liberal arts school in Indiana, the team had proposed outfitting buses in Kenya as mobile hot spots, complete with tablets loaded with educational apps for the children taking public transportation.
But the idea — floated last November at the campus-level contest for the Hult Prize, which challenges student entrepreneurs to find solutions for the world’s most pressing problems — wasn’t all that scalable. If new buses had to be purchased, it would be too expensive to implement and only add to a severe congestion problem on city streets.
“It was very disappointing,” recalls Iman Cooper, 23, the only American-born member of the group, who graduated from Earlham last December. “We really believed in the idea. We thought it was a great business concept that would have a lot of impact. We were surprised we lost and were scratching our heads.”
A MILLION-DOLLAR PRIZE FOR THE ‘UBER OF BUSES’
But after investing more than a month of work in the presentation, the team decided to pivot, coming up with an alternative idea and pitching it directly in the open competition round for the Hult Prize. The concept they ultimately developed — dubbed Magic Bus Ticketing — is an app based on text messaging that helps to make more efficient the byzantine minibus system most Africans depend on for daily transporation. In Kenya, people can lose up to two hours a day waiting for a bus, and up to 40% of their daily earnings for a round-trip ride.
The Earlham undergraduate team brought that startup plan to a Boston regional competition for the Hult Prize, won against some 80 teams in March, and then made their way to the finals in New York City last month. Hult International Business School President Stephen Hodges describes the contest as “the Super Bowl, Shark Tank, and American Idol all rolled into one.”
At the event, held at the Global Clinton Initiative annual meeting in New York, the group beat four other regional winners to win the $1 million prize from President Bill Clinton. “The transportation system is plagued with inefficiency,” Clinton said as he awarded the prize. “Soon, some big wig will be calling this the ‘Uber of buses.’”
FROM DEFEAT TO TRIUMPH IN TEN SHORT MONTHS
In the space of 10 months, the Magic Bus team embarked on an emotional roller coaster ride from the absolute bottom to the estatic top. “It was exhilarating and it was surreal,” recalls Cooper. “After a year of working on this project, it’s amazing that it is actually going to be put to use. And to be given the award by President Clinton was exciting in itself. How often does anyone get awarded a million from Bill Clinton?”
Indeed. The story of how these four students captured the ultimate social enterprise prize is one of disappointment, hard work, resilience, and victory. It includes their efforts to crowdfund a pilot that included traveling to Nairobi for a nine-week market test of their idea, an eight-week stint in an accelerator in Boston to refine and perfect the business plan, countless rehearsals of their presentation, and the moment they stepped on stage to receive the million-dollar award from a former President of the United States.
Now, the hardest work of all begins: Implementing the idea first in Kenya and then spreading it to other nations in Africa. The team doesn’t get the $1 million outright. Like funding from a venture capitalist fund, the group has to meet certain targets and objectives to gain full access to the prize. For a group of four students, the oldest being 23, even the idea of having $1 million to pursue a dream is something they never could have ever imagined.
HOPING TO WAIT OUT THE GREAT RECESSION IN AN MBA PROGRAM
Ahmad Ashkar was an MBA student at Hult when he thought up the idea for the social enterprise competition
The origins of the prize can be traced to Ahmad Ashkar, the son of Palestinian immigrants, who had been working Zayan Finance, a New York-based firm specializing in placing alternative debt on U.S.-based commercial real estate assets. Ashkar, then 24, was working between New York and the Middle East for Zayan when the Great Recession hit. “The world was collapsing,” he recalls. “I woke up one morning and witnessed my entire sales team disappear: 50 people were let go over night.”
He thought he would wait out the recession by enrolling in 2009 in the MBA program at Hult International Business School after which he planned to return to finance. But during a classroom lecture on Hult’s Boston campus by Charles Kane, then president of the One Laptop Per Child nonprofit, a light bulb went off.
“I knew nothing about the social sector then, but I was inspired by what Kane said,” recalls Ashkar. “I got excited about selling a product to the poor. I had never considered a company that sold products to the poor. But I realized there was a market segment out there that was more than capable of paying for products and services and in fact enjoyed it more than getting a handout.”
BUMPING INTO HULT PRESIDENT STEPHEN HODGES IN THE MEN’S ROOM
His initial thought was to use the school to launch a global case challenge that would encourage students worldwide to create social enterprises that would fulfill the mission of One Laptop Per Child. “We all realized our brand wasn’t strong. We didn’t go to Hult because it had pedigree. We knew we would be going to school with people who would be looking for something better. We came together because we knew we would meet like-minded individuals at Hult who were crazy enough to pick Hult in the first place. We came together as a class and self-funded the program, spending over $100,000 on it.”
He and a team of students reached out through the Hult network, putting out a call to action. Though they had no prize money to offer, the contest attracted 300 participants from 70 universities with regional faceoffs in Boston, Dubai, and London.
A week before the event, Ashkar bumped into Hult President Stephen Hodges in the fifth floor restroom. “I saw him walk in and I went to him like a laser,” remembers Ashkar. “The reaction was mixed. It was, ‘I can’t believe you pulled it off’ to ‘This could be a pivotal moment. We either get behind you or some how stop this from happening.’ He decided to stay and ended up attending the event and witnessed the passion an drive of these business students.”
The Magic Bus team in Kenya during its pilot In May & June of this year
‘YOU ARE AN IDIOT. YOU NEVER SAY NO TO MEETING A SUCCESSFUL ENTREPRENEUR’
The next year, the contest was dubbed the Hult Global Case Challenge and attracted the attention of The Harbus, the student newspaper at the Harvard Business School. A colleague of Bertil Hult, the Swedish entrepreneur whose family philanthropically supports the Hult School, brought the article to the billionaire. As Ashkar’s graduation from Hult neared, he received a phone call from Bertil Hult’s office with a request for a meeting. Ashkar, then ready to reenter investment banking with his MBA, was told to pack three days worth of clothes and fly to meet the then 69-year-old entrepreneur in Lucerne.
At first, Ashkar was not sure he wanted to make the trip. “My dad said, ‘You are an idiot. You never say no to meeting with a successful entrepreneur. You can’t turn him down.”
He showed up in Lucerne in August of 2010, met directly with Bertil Hult, and talked non-stop for two days. “We talked about my parents immigrating from Palestine and my experience at Hult and the impact of the financial recession,” remembers Ashkar. “It was only about an hour before the final meeting over dinner that I brought up the idea of the Hult Prize and what would be next.” He recalls the conversation going something like this:
“What do you need?,” asked Hult. “What are you missing?”
“We arranged for some funding but we really need is some seed capital,” replied Ashkar.
Hult asked the obvious question: “How much?”
‘I WAS A 25-YEAR-OLD WHO NEEDED A BABYSITTER
Swedish billionaire Bertil Hult anted up the million-dollar prize
Taken aback, Ashkar slighly hesitated. “I learned early in finance to always ask for ten times what you need so I said a million dollars. And to my amazement, Bertil Hult looked at his CFO (chief financial officer) in the meeting and asked how much it cost to sponsor the world sailing championships. Once he got the answer, he said, ‘We’ll do it.’
“Then I said you can’t just have a million dollar prize. You have to have money for operations and marketing. We got a commitment and Steve (Hodges) would have to come up with operating capital. We weren’t a foundation yet, just an initiative that needed a home. And I was a 25-year-old who needed a babysitter.”
There were two conditions to the million-dollar gift. The first was to name the context the Hult Prize and the second was that Ashkar would have to come aboard in a full capacity. “I was split and didn’t give them a decision on the spot,” he says. “I decided this was a once in a lifetime opportunity not for myself but for humanity. I was 25 and stilll thought I was a man filled with false pride and all that good stuff and thought this was a career ending move not to get back into finance in my prime. I took a risk and did it.”
NEARLY 250 TEAMS WORLDWIDE COMPETED THIS PAST YEAR
Since then, the Hult Prize has become the world’s largest student competition for social good, partnering with the Clinton Global Initiative and culminating with a presentation to the winner by President Bill Clinton. Now in its seventh year, nearly 100,000 college students have participated in the contest from nearly every country in the world. Each year, Ashkar tosses out a challenging problem—education, clean water, energy, food, healthcare, and early child development—and invites students to come up with solutions.
This year’s challenge—to build a scalable social enterprise in a crowded urban space—saw nearly 250 teams from universities all over the world compete. In the mix were teams from Harvard Business School, Northwestern University’s Kellogg School of Management, INSEAD, HEC Paris, and the London School of Economics. There also were Ivy League teams Columbia, Cornell, Brown, and the University of Pennsylvania. Yet, the five regional winners from competitions in Boston, San Francisco, London, Dubai and Shanghai—were largely from lesser known schools, with the exception of a team from the University of Cambridge. There was BRAC University, Tecnologico de Monterrey, Hult International Business School, and the winning team from Earlham College. They all shared a single goal: To create, in the words of Ashkar, “for profit, impact center and market driven organizations” that solve big social problems.
“If you went to Harvard Business School or Harvard’s Kennedy School and compete, I love you to death but I don’t care if you don’t participate in the Hult Prize,” insists Ashkar, now CEO of the Hult Prize Foundation. “What I am trying to do is to take people who have no intention of going into this space and bring their know-how into this field. We don’t measure ourselves by how many billion dollar companies we helped to launch. It is to inspire others to create basic ideas. It’s the people behind those ideas who have changed the game.”
‘I’VE LIVED THIS CHALLENGE ALL MY LIFE’
You would be hard pressed to find a more passionate group of young people than the four members of the Magic Bus team. Although they hail from four different countries, they share a couple of things in common: An entrepreneurial zeal and a passion for social causes. Cooper is the only American on the team, born in California and largely rasied in the Maryland suburbs of Washington, D.C. After attending the International School in Indiana, she chose to go to Earlham College because of the international diversity of the study body. Students at the liberal arts school hail from more than 70 countries and 11 languages are taught on campus.
“It was very natural to work with team members from all over the world,” she says. “I love working with international people.” Like her teammates, she also had a natural entrepreneurial bent. Her parents were entrepreneurs and she started her first business with her twin sister at the age of nine, making handmade women’s accessories from scarves and earrings to pins and cigar box purses. Cooper had tried to compete on campus for the Hult Prize a year earlier, but it didn’t work out because of the workload. Two members of the team had an edge: They were campus directors of the Hult Prize the year before.
“We were talking in the cafeteria and came to the point of view that transportation is a way to connect people to goods and services,” she recalls. “We started talking about the original idea and I gave them some feedback on things they could add and they thought it was valuable and asked me to be their fourth member. After losing on campus, we went back to the drawing board and got feedback from judges on why we loss.”
Their input served one purpose. It gave the team a broader sense of what other things could work, says Wyclife Omondi, 22, a Nairobi-born economics major at Earlham who will graduate at the end of this year. He knew first hand what it was like to wait for a minibus, called an matatu in Kenya. “I’ve lived this all my life,” he says. :When you see the amount of time people spend in this matatus waiting. First of all – it’s undignified. You think people could have spent much more time doing other productive things.”
But it wasn’t until the first failed idea that the team even got to thinking about the concept that actually won. Leslie Ossete, 21, who graduated in May with a degree in economics and business and non-profit management, had originally brought the team together. “When we lost, I thought there was something about our idea,” she recalls. “When you come with an idea, there are so many expectations. It had taken a lot of time and effort.”
Coming from the Congo, she had the same experience with minibuses as Omondi. The problem, she explains, is everyone’s in the dark on what the buses will be like on any given day. Riders have no idea when the buses are coming because the schedules are unpredictable. In Omondi’s hometown, people can lose up to two hours of their day waiting for a bus.
The Hult Prize competition at the Sheraton Times Square Hotel in New York
A TECH SOLUTION THAT ALSO COULD INCREASE INCOME FOR BUS CREWS
That can be devastating for people who depend on the matatus to get around. “I’ve been the one waiting for the bus. I know what it means for a young student to [miss] class and [not] go home on time,” Ossete says. “I have friends and family who have missed important opportunities because no bus showed up.”
Bus crews, the driver and the conductor, lose out too. They don’t know if there are enough passengers along the route for them to make an income. “They are worried they won’t carry enough passengers along the route,” Ossete says. If they don’t have enough passengers, they might not make enough to cover the rental cost of the bus. Conductors might overcharge passengers who get on. In Kenya, the average minimum wage is around $5 a day, and up to half of that may end up going to bus fares.
If the bus waits for all seats to be filled before kicking off, passengers along the route are stuck in a commuters’ purgatory as packed buses pass them by. Waiting at the terminal for extra passengers costs the bus crews money too, though, since they could use that time to make more rounds. With Magic Bus Ticketing, however, a bus crew can use a tablet app to see how many passengers are waiting on the route. So they’ll take off with a bus that hasn’t filled up, counting on the riders who bought digital tickets. Riders who want to use Magic Bus can text a code to get the fare prices. Then they text again to buy a fare and receive a digital ticket to show to the conductor.
FAVORABLE RESULTS FROM A PILOT ON TEN BUSES
After winning the Boston regional competition, the team crowdfunded a pilot, raising $10,000 and gaining help with travel expenses to Kenya from a couple of early seed investors. A developer in Kenya created the technology platform used for the nine-week pilot. The results were highly favorable: One out of every four commuters who used the service said they saved an hour per one-way trip. The team sold 5,000 booked tickets in nine weeks on only ten buses and racked up 2,000 unique users, with 75% using Magic Bus more than three times. Bus crews can double their income from about $5 to $10 a day through the extra trips they’re able to make because of the app.
Overjoyed with the results, the team then flew to Boston in June for the eight-week series of seminars, lectures and coaching sessions in the accelerator. Their presentation skills got a workout from the formal business plan presentations every Friday. “The experience tears apart your business model from every single angle and challenges you to look at it from every single perspective,” says Cooper. “One of the things we were looking at was our business model and pricing structure and also looking at the most effective way to scale.”
The incubator is splint into several phases. Early in each of the eight weeks, there is an innovation curriculum with lectures from academics on business opportunity mapping, marketing and strategy. There are evening speakers twice a week, often founders of startups. The student entrepreneurs have unlimited one-on-one coaching, once a week socials to build camaraderie among the competing teams, and, of course, the pitch Fridays.
‘I TOLD MY WIFE TO CANCEL ALL MY TRIPS THIS SUMMER’
“I was more involved than ever this year because the batch was struggling,” concedes Ashkar. “After the first day, I went home and told my wife to cancel all my trips this summer. I told her, ‘I am going to stay with the kids all summer long.’ We are hands on. Every company has a mentor and a coach. Almost all the teams are mentored by others who have already gone through the Hult Prize.”
By the time the Magic Bus team competed in the finals in New York, Ashkar says the group probably went through six or seven pivots through its formal pitches on eight consecutive Fridays. Still, they walked up on the stage for the six-minute pitch, followed by a Q&A from a panel of judges, with plenty of jitters. “We were very nervous because it’s something we are very passionate about and we wanted to do well,” says Omondi.
Magic Bus was the first of the five teams to present. Each group member took turns during a flawless presentation, then waited in the audience, listening to every other team’s pitch. Several of the other ideas seemed highly promising. Among them was a team that showed off a food cart with a solar-powered charging station for customers’ electronic devices — another way for street vendors to make money. Yet another team came up with a way to vastly increase the recycling of trash in Mexico, while yet another pitched an identification system for poor people using biometric technology.
NOW, THE BIGGER CHALLENGE TO IMPLEMENT
But it was Magic Bus that prevailed. When Clinton strolled to the stage and announced the winner, a shriek could be heard throughout the vast ballroom of Sheraton Times Square Hotel in New York.
The group is already back in Kenya working to implement the idea, with the hopes of spreading it to Uganda and Tanzania. “This is the bigger challenge for us because now we go on the ground and have to do good things,” says Omondi.
Ossete’s advice to others who want to compete in future Hult Prize contests? “Trust your gut. If you have an idea, you should go for it no matter what. People told us, ‘I don’t think it is scalable. I don’t think it’s the right time for Africa right now. It didn’t discourage us, but skepticism is part of the life of an entrepreneur.”
