Project Proposal

to trigger development in Ethiopia through commercial projects

Abstract
The Business Machine is a platform that intends to facilitate business investments and
knowledge transfer from Europe to Ethiopia and provide opportunities for people eager to
get involved in a different kind of development work. The key conviction is that the creation
of profitable business ideas is one means to overcome the syndrome of dependency often
observed in developing countries. Therefore, the identification of promising business ideas is
part of the process and not given from outside.

To test the feasibility of the idea, a first pilot project will be launched in 2010. In contrast to
conventional approaches, The Business Machine only provides a few rules and a rather lose
frame of constraints.

A team of motivated persons from both Ethiopia and Europe, all willing to invest some time
and money in a new business project, will be selected in the course of the next few months.
In a one-week meeting in Ethiopia at the beginning of 2010 this team will come up with
possible project ideas. The implementation will start as soon as a clear selection of the ideas
and a convincing business plan have been worked out. The “entrepreneurs” from Ethiopia
and Europe will carry out the implementation of the project together and share profits or
losses.

If the pilot project proofs to be successful, The Business Machine will be implemented as a
platform for other projects. Risk capital sought from external sponsors will be made available
for these projects. The principle of close collaboration and joint implementation, the spirit of
entrepreneurship where risks and profits are linked closely, a mix of broad competences in
an atmosphere of intercultural exchange and the principle of “brain gain” (highly educated
and skilled people from the south get an opportunity to stay in their country, at the same
time expert knowledge from the north is brought in) will form the cornerstones of The
Business Machine.
Table of contents
Main principles underlying The Business Machine ................................................... 3
A personal perception of today’s development work (by Stephan Brun) .......................3
An entrepreneur’s attitude as proof of confidence ......................................................4
Profits in development work: no sign of day robbery ..................................................4
Seize potentials through innovation ..........................................................................5
True partnerships and intercultural collaboration........................................................5
Details about the first pilot project ........................................................................ 6
General principles of the platform .............................................................................6
What a project might look like..................................................................................7
The next steps for the first pilot project in Ethiopia ................................................ 8
Phase 1: selection of a project group ........................................................................8
Phase 2: intercultural creativity meeting....................................................................8
Phase 3: joint implementation ................................................................................ 10
Annex 1: Preliminary schedule of the pilot project and the platform ...................... 11
Annex 2: Bibliography......................................................................................... 13

Picture 1: Ethiopia, a country between tradition and modernity

Main principles underlying The Business Machine
A personal perception of today’s development work (by Stephan Brun)
When I worked in Addis Ababa (Ethiopia) for one year, the huge number of good
development projects I saw impressed me a lot: Organisations working for street-children
and poor families, creating job opportunities for young people, giving shelter for elder people
with no social security, teaching the development of urban agriculture, making prostheses
for people with disabilities...
Most of the projects seemed well thought out, based on a clear concept and carried out by
motivated and competent people. Yet, after a while I began to feel suspicious. Just like all
human beings, Ethiopians, too, are clever people. They behave rationally most of the time. I
started seeing children “hopping” from one NGO project to the next. I saw young people
learning professions, and even though these professions would not offer them a bright future,
they underwent the training just because it was offered by an organisation. And I realized
that so many people were just sitting all day and waiting for God, faith, family or an
organisation to improve their situation. I suddenly had the feeling that a whole people was
just trying to satisfy – very rationally – a big “aid-industry”. By remaining in their state of
helplessness, they offer opportunities for many NGO to help.
This is, of course, not true for everybody: There are with no doubt many people in need.
Nevertheless: Couldn’t it be that with the best intentions and convincing projects on a micro
level a whole country was – on a macro level – being brought to lethargy just waiting for
somebody else to improve its situation? Or was I just biased by my western culture and did I
not understand the Ethiopian social mechanisms and their benefits?
I realized, however, that other people, even from Ethiopia, had a similar feeling. In his
biography, Haile Gebrselassie, one of the greatest long distance runners ever and at the
same time a successful Ethiopian businessman, says:

“[People] have to become responsible for themselves and their

families. To depend on foreign food is to stop living for yourself.
I remember when I was a boy my father used to put enough
grain and maize into reserve to last for a year. We always knew
that we had something to live on if there was a drought or a
flood. But today farmers don’t do that. Not when they know that
one of the 200 relief agencies based here will provide food for
them. […] We need Ethiopian businessmen who aren’t afraid to
change traditions. […] But they can’t simply follow American or
British ways. They have to remain Ethiopian; they have to live
and act as Ethiopians do.” (Denison, S. 54)

Picture 2: Famous runner Helping, even with the best intentions, often is an act of
Haile Gebrselassie arrogance through which people are incapacitated. This doesn’t
seem to be a new finding. Dervla Murphy, who travelled trough
Ethiopia in the nineteen sixties, wrote:

“[…] the worst irritant […] was the inability of so many foreigners to regard the Ethiopians as
fellow-humans; it is indeed shocking to think that hundreds of complacent Westerners are
sitting in the capital drawing fat salaries for ‘helping’ a people with whom they have so little
sympathy that effective help is impossible.” (Murphy, S.277f.)
An entrepreneur’s attitude as proof of confidence
Haile Gebrselassie expresses his conviction that Ethiopians must change and develop
entrepreneurial spirit to assure development. It is easy to accept a well-paid and very safe
job in an NGO even if one has doubts about the effectiveness of its program. If somebody
believes in the necessity and the success of a project, he or she should be willing to take
risks on his/ her own.
But the same is true for people in the west:
In Switzerland, for example, it is many young
people’s dream to work in the field of
developmental aid. Yet as long as
development remains a “job” there is a big
chance that those well-educated men and
women continue to contribute to the
syndrome of dependency described above.
Even the very noble gesture of volunteer
work may be in this category of well-meant
but harmful actions. Without a strong
conviction that a developing country has a
great potential, most of the measures taken
will be futile and the perception of the people
Picture 3: Market area in Addis Ababa
from the south remains that of poor,
incapable subjects that need help.
The logical consequence would therefore be: “If I believe in the potential of a person or a
people, I am convinced that they can succeed. If they can succeed, there is potential future
profit. And as a consequence, everybody who believes in this success should be ready to
take personal (financial) risks.”
In this logic the world would not need more development work, but more (young)
development entrepreneurs ready to risk their own money because they belief that together
with capable partners they can change the world.

Profits in development work: no sign of day robbery

In the context of relations between the countries of the north and the south the word
“profit” often has quite negative connotations: History has taught us that, too often, profits
were just on one side, while the other side was exploited and humiliated. Western countries
squeezed out natural resources and brought people to slavery. Part of today’s wealth of the
west comes from this unjust exploitation.
Yet mourning the past and moaning or blaming our ancestors for today’s situation will not
change anything. Guilt is not a good starting point for future-orientated development.
Therefore, profit should not necessarily be seen as a synonym for exploitation.
In any business relationship, profit is the measure of success and the capital for future
investments. If profit is based on innovation and hard work instead of extortion and short-
term thinking this will result in a win-win situation where the one side’s gain is not equal to
the other’s loss.
The Business Machine wants to be a clearly profit oriented project. Profit shall be the
measure of success. Only an innovative, well-designed project will be able to prevail and
create added value to bring the country and all the involved entrepreneurs a step further.
The project has to be self-sufficient and the capital invested by its shareholders has to
produce standard returns.
Yet striving for profits will not be the one and only goal to which everything else has to be
sacrified. Ethical, social and environmental aspects will be the cornerstones of the project.
Such guidelines protect any enterprise against being seduced by quick gains as well and it
acts as a watch dog for sustainability.

Seize potentials through innovation

Economically speaking, compared to the west, Ethiopia and many other countries in the
south are poorly developed. At first glance, this doesn’t seem to be a promising starting
position for a business project.
Yet, a positive reframing of these facts renders a different point of view: Relatively low
economic development means that there is great potential for catching up and that there is
much unused potential. For young entrepreneurs, Ethiopia can be the very first opportunity
to start their career: There are many economic niches not yet occupied. Markets are young
and business opportunities are still open for development. Unlike in countries in the west,
not every good idea has already been thought out and set into practice several times. And
finally, a developing country gives the opportunity to start a business with relatively small
amounts of capital: as in many other economies, small and medium-sized enterprises can
become the driving force of innovation and growth. Especially business in the service sector
is easy to start and promising as labour costs are comparatively low.
As many other countries in the south, Ethiopia is suffering from a considerable brain drain
problem: The well-educated work force is leaving for other countries. The economical losses
of this migration are dramatically lowering the returns a country has on its investments in
education. The Business Machine wants to contribute to turn this trend around by offering
opportunities in the country and by bringing in motivated foreign business partners. Thanks
to this “brain gain” and the creation of small and medium-sized enterprises the Ethiopian
economy receives sustainable input for future development.

True partnerships and intercultural collaboration

Participation of local people is, to a certain degree, part of every development and business
project. It has become a common understanding that any kind of activity must be rooted in
the local community and that knowledge about regional cultural standards and customs is
crucial for success. Cases where this so-called local “ownership” is put into practice are,
however, rare, and the kind of local involvement varies a lot between projects: Most
business and NGO gives responsibility for operative questions to local people. Some go even
further and include regional knowledge in the phase of project design. However, the type
and content of the activity is always given from the outside in advance. This domination of
external stakeholders can result in poor outcomes: Local people do not orientate their
actions to their most urgent needs or to the most promising business activity but, rather,
focus on topics given by external donors or partners.
Consequently, The Business Machine wants to try out new paths in the field of joint
development and implementation. To start with, the phase of project selection will be
designed as a mutual decision of foreign and local investors. Thanks to a pool of people with
different backgrounds from Ethiopia and Europe, various knowledge and experiences shall
come together to find, design and implement innovative projects.
In an intercultural learning environment where different attitudes and experiences meet and
discuss, diversity is used as an asset to find creative solutions for non-standard challenges.
Details about the first pilot project
General principles of the platform
The Business Machine brings together people from Europe and Ethiopia who are both ready
to launch a project. The two sides bring in their own ideas, act as entrepreneurs and are
therefore ready to risk a certain amount of capital. This capital will be brought in as money
and/ or as working hours. The entrepreneurs are the owners of the project and not hired as
employees. The details will be worked out as the project develops. This process is part of the
concept of joint development and implementation.
People can either join an existing project or found their own business. If a match between
people from Ethiopia and Europe is made (agreement about a business idea), a detailed
business plan has to be worked out. The partners bring in a certain amount of starting
capital. If this initial money is not sufficient for the project start, the partners can apply for
additional money from an external fund. This risk fund of The Business Machine will be set
up by private money or donors. It will scrutinize applications and decide about the amount of
and the conditions tied to the risk capital given to the project. This capital has to be paid
back with interest during the development of the project.
Should the pilot project be successful, a detailed analysis will show if it is possible to finance
the platform part of the program with external money. In contrast to the general principles it
might make sense to seek support from public money for these initial activities like the
network for matching partners from the different areas. It would, however, not be in line
with the current philosophy to support a whole business as this would mean an
abandonment of the principle of entrepreneurship.

Project 2

Risk capital
Project 1
Project 4
Project 3

business ideas
human capital
financial capital

Illustration 1: The principles of a platform

It is up to the specific project to decide what the collaboration between participating

entrepreneurs will look like. Commitment and dedication to the project are crucial. Yet
different patterns of collaboration are conceivable, depending on the kind of project chosen.
It might be necessary that Ethiopians and Europeans work together in Ethiopia during long
periods of time. The other extreme pattern might be that after the first meeting and the
creation of the business plan no more physical contact takes place and both partners each
work on their side of the common project and communicate through electronic means. In
between, all other forms of collaboration are thinkable, too.

What a project might look like

It has been said several times above: The exact content of the pilot project will be decided in
the course of the first phase (joint meeting). This decision will largely depend on the people
involved and on their competences and ideas. It is therefore not possible to give concrete
examples. There are no limits to creativity and projects might range from a classical
counselling company to a specialised handicraft to a computer business, a trading relation or
a production activity in the second sector. As long as it is done in a creative and innovative
way and with a realistic chance for success and profit, anything is possible according to the
motto: “Jump into the water to discover what you will find beneath the surface!”

Picture 3: Addis Ababa, slum area in front of the luxurious Sheraton hotel
The next steps for the first pilot project in Ethiopia
To test the feasibility of the approach, a first pilot project will be launched during the year
2010. According to the intentions of The Business Machine, the concrete business idea will
only be worked out during the process of development. The following sketch is therefore just
an overview of what this process might look like.

Phase 1: selection of a project group

The project will be advertised through different channels appropriate to the country
(personal network, internet, newspaper advertisements). If necessary, there will be a public
meeting where the idea is explained in detail and where potential participants can ask
questions and get more information they need for a decision.
Every potential participant will have to fill in an application form and explain his/ her
motivation. In Ethiopia and in Europe there is one person in charge of this advertisement
process (project facilitator Ethiopia and project facilitator Europe). Both of them carries out a
very rough selection to filter out applications that do not fulfil basic requirements. Should
there be too many applications, there may already be a first selection to reduce the number
of persons which should not exceed 10 to 15 persons per partner group (this selection will
however be very formal and not based on quality criteria!).
The accepted applications of every country enter the so-called pool. During the preparation
phase these people will work on planning the joint meeting in Ethiopia (see below).
To choose the people to participate in this pilot meeting in Ethiopia, a cross-selection
procedure is carried out: The pool of every part (Europe and Ethiopia) receives the
applications of the other side and short lists approximately 3 to 7 persons using their own
criteria (for example those persons that look very promising to the project). A balance of
qualifications, gender, age etc. is encouraged to guarantee the diversity of people needed
for the project launch.
It is possible for persons who are not selected and who do therefore not participate in the
joint meeting in Ethiopia to stay in the project, to continue working in their country and to
join in later during the process of development.

Phase 2: intercultural creativity meeting

The selected people form the initial team finalise the preparation of half of the joint meeting
that will take place in Ethiopia. The cost (flight, board and lodging, fees etc.) for the first
meeting will be covered by the (European) participants.
During one week approximately, they meet in an open, creative atmosphere. The meeting
will consist of getting to know each other and discovering the strengths of all the persons
involved. The second, larger part contains several brainstorming sessions in which at least 5
business ideas will be created. Creative informal methods will be used to think “outside the
box” of conventional ideas. This phase will be crucial for the whole project as these decisions
will influence the further development of the whole process. Much stress will therefore be
laid on the preparation of this creativity meeting, leaving at the same time enough flexibility
for the intercultural environment in which it will take place.
The final goal of the week is to have a draft of at least one of those ideas that will be
followed. After that a plan about the continuation during the next few weeks and months
must be made available.
 applications
advertisement/
applications
advertisement/
formal selection formal selection

cross selection
Pool Pool

Team Team

Joint meeting
in Ethiopia

Joint team
of persons
committed
to continue
the work
Project launch

Illustration 2: the first steps of the pilot project

After the meeting, every person involved has to decide about his or her willingness to
continue. This will somehow be the point of no return. It is possible to participate in the
meeting and to contribute just by curiosity. But after the project has been decided everybody
will have to declare his or her personal involvement. A contract between all the remaining
(and potential newly added) partners will mark the starting point of the joint (ad)venture
(the legal basis for such a cooperation will be laid after the pilot meeting and possible forms
of collaboration will be worked out with a lawyer). In the course of the further development
it will become clearer for everybody what the cooperation (how long and how often in
Ethiopia etc.) will look like.
To assure the entrepreneur commitment, every partner will have to make an investment in
kind (work) or money to the project. The financial contribution will be defined during the
pilot meeting in Addis Ababa and it will be individually adapted to the financial capacities of
the partners. One possibility would for example be to ask a contribution of a one month
salary from everybody. Working time given to the project on the other hand will be
mathematically converted into money. To keep the entrepreneur’s principle, it is however not
possible only to invest working time (then it would rather be volunteer work) or money (then
it would be pure investment). So a certain balance between the two factors will have to be
sought during the pilot meeting.
The personal contributions in kind and money will be taken into consideration to calculate
the share the partners are holding of the project. In case of success, the net benefit of the
business project will be distributed to the share-holders in accordance to their contributions.

Phase 3: joint implementation

The phase of implementation is not yet worked out in detail as it will largely depend on the
project chosen during the joint meeting in Ethiopia. Immediately after the signing of the
business contract, preparation work will start. The first steps of implementation will probably
be done in the background (office): the set-up of a convincing business plan, facts and
figures of the project, projections of capital needed and expected gains (time of break even
etc.), clear statements about the projects vision and mission, the setting of a legal basis for
the activity, identification of partners, customers and competitors etc. It will be crucial to
define clearly the responsibilities and to allocate the tasks to work on. Initially,
communication between partners will have to be stressed as they are not physically present
in the same location.
The time of preparation and therefore the date of the actual start of the project will depend
largely on the field and the scale of the chosen activity. As a first guess, a date in summer
2010 might be more or less realistic.
Besides the implementation of the pilot project the general frame of „The Business
Machine“ will be carried on during 2010. The aim will be to finalize all the legal questions, to
identify partners and potential participants, to find risk capital and to break down the
different parts of the platform.

Picture 4: Construction site in Addis Ababa

15 of August 2009/Stephan Brun
Annex 1: Preliminary schedule of the pilot project and the platform
2009 2010

July August September October November December January February March April

Advertisement of the project

Selection of the pre-team

Information meetings

Selection of the core-team

Agreement on the visit week

Preparation of the visit week

Visit week in Addis Ababa

Minute of the decisions

Start of preparation work

Decision about personal
involvement
Legal and administrative
preparation
Foundation of an international
enterprise
Start of the pilot project activity
in Ethiopia
Preparation of the long term
"business machine"
 Mai June July August September October November December

Advertisement of the project

Selection of the pre-team

Information meetings

Selection of the core-team

Agreement on the visit week

Preparation of the visit week

Visit week in Addis Ababa

Minute of the decisions

Start of preparation work

Decision about personal
involvement
Legal and administrative
preparation
Foundation of an international
enterprise
Start of the pilot project activity
in Ethiopia
Preparation of the long term
"business machine"
Annex 2: Bibliography

• Murphy, Dervla: In Ethiopia with a mule. London 1994 (Flamingo), originally

published in 1968.

• Denison, Jim: The Greatest - The Haile Gebrselassie Story. Halcottsville, New
York 2004.

Picture 5: Ethiopia, a beautiful country. Barley field in a rural area.