Tim Modise chatting to well known broadcaster Pat Pillai about the development of young entrepreneurs in south Africa. He is the CEO of LifeCo Unlimited which recently raised R32 million from the Industrial Development Corporation and Standard Bank to support its programmes.
Pat Pillai is here with us on our Transformation section. It’s a pleasure to talk to you, Pat. You just left broadcasting recently to take on a fulltime position as CEO of LifeCo. The organisation has been going for quite a while now.
Eighteen years Tim, although there was an attempt to start it 28 years ago. It ran for a year, failed, restarted 18 years ago, and did a little bit better.
Now, when you look back over the 18 years, 55,000 young South Africans who have been assisted by your efforts and the organisation that you’ve been involved with, what exactly do you do?
We’re primarily concerned with fixing the big legacy gap that we have in South Africa and (we think) across large parts of Southern Africa in that entrepreneurship and achievement is a state of mind. It is a way of thinking. It is not a series of qualifications you need to get. If that were the case, we’d have the most successful nation in the world with all the business plans we’ve written. We focus entirely on that. It’s a deep consciousness of achievement and entrepreneurial thinking. Then we put capital in the hands of these young leaders. Some of them are not that young. Some, after 18 years, are now parents – 35/40 years old – doing bloody good business.
We talk about transformation in South Africa, mostly from a macro point of view. We believe that if you change the Government and the policies, if you get everybody to agree first, then you can bring about change. However, you are doing it at a micro level on a one-to-one basis. Tell me about the experience you’ve had over the years.
It’s been an extremely fascinating, confusing, and empowering experience. I’ve been confused most of the time. I’m a teacher, by qualification. I’m an accidental journalist. I ended up in this world that you and I occupy for so many years (you’re still there and I’ve left), but it’s really been a curiosity and staying curious about what it is that makes leaders work. Generally, there are a few things. Go through all the practical, and strip out all the academic stuff. It’s a way of thinking. It’s a way of thinking about opportunity, and how they can create value in the world and take people with them. We just found that in our curriculum, there wasn’t anything that dealt with that. If you could put capital in the hands of people…we call it the psycho-economic aspects of empowerment: mindset and money together in the market, does something marvellous. The classroom exists right there when you’re trading and making it happen, whether it’s 5,000 or 500,000 and we’d look at anything in between those two figures.
Practically, how does it work? How do you recruit the youngsters who come through your courses? Where do you find them? How do you fund them? What do you teach them?
LifeCo Unlimited itself is a social enterprise. We’ve chosen to do it as a Trust. I don’t own a piece of it and neither can you. Ultimately, it’s this entity that has an asset base of R110m, which we’ve built up over the last 18 years. We put that to work and we sell our services to other organisations. We sell our services to universities, schools, companies, and Government. We’ll invoice them and we’ll then provide our programs as well as the capitalising of these individuals, and do so at a mark-up (at a fee). Any profits made are put right back into schools that have the least and keep them in the system, and develop those young people.
I’d like to look at the impact that the types of courses you offer has had on these young people who’ve gone through LifeCo Unlimited programs.
Well, 55,000 people to date and of those, about two percent are the classic entrepreneurs. In other words, they’re practicing running businesses. They’re enterprising in every way. Four thousand of those are running entrepreneurial projects. In other words, they’re still in school or university and they have a small amount of capital. Win, lose, or draw; we’ll work with you, but you’ve learned the psycho-economic aspects. What we try to do is measure in schools and universities. The first one is retention. Do they stay in school versus those who are not in our program? The next one is, to what extent are they able to pass versus those who are not doing our program? We have a natural, controlled experiment. Thirdly, how well do they do? Generally, we find that there’s a ten percent increase in all of these – the controlled experiment comparison. Ninety-seven percent of the 55,000 are engaged either in further study, employed, or running their own businesses.
So that would be how you rate your success.
That’s our impact analysis. As an impact organisation – a social enterprise, ourselves – we don’t just measure bottom-line. It’s important. Money’s an enabler for real empowerment. We want to measure the impact on our people.
Many young people out there who are listening to us would wonder how they get involved. Where should they go if they want to reap the benefits of your programs?
The bulk of the applications happen with our institutional partners. If you happen to be in the P.E. area for example, you would go to MMMU because they’re a partner of ours, enrol in MMMU and then get our program, or the local high school, etcetera. We don’t enrol straight off the street ourselves, as another school might do. The other thing is that they can go to our website. We recently announced a R32m development plan. The IDC and Standard Bank have hired our services to find, fund, and support impact entrepreneurs – social/environmental/energy entrepreneurs. Our website is www.lcu-sa.com. Go on there. There’s an application button. If you think that you are already practicing as an impact entrepreneur and you need some capital and the support to make that happen, contact us. We may well award you and we’ll certainly make sure that we keep you (Tim) informed of some of those awards.
I’m very excited to hear that the IDC (Industrial Development Corporation) and Standard Bank have come to the party in this regard. Are they looking at specific areas or is it open-ended?
The R32m is specifically earmarked for impact entrepreneurs and we don’t mind. Whether it’s registered as a private company or a Trust etcetera, it’s hard as an NPO because you can’t exactly go out and build the kind of enterprise strength because it’s largely donor-dependent. This money was given to us to find those entrepreneurs who use business principles for social, environment, and energy impacts. It’s not just donor-dependent. If all you have is a great NGO, but you’re looking for donations, we won’t back you. We’d like to know that you’re able to trade for change, and not beg for small change.
Social media and of course, the trends around the world are making societies become globalised. You have to learn from other societies as well, as you develop your program. You’re working with any global partners. Are you looking at any new partnerships at this time?
Yes. LifeCo Unlimited South Africa, along with Unlimited India and Unlimited U.K. came together and created a global, social entrepreneur network along the same principles I described now in terms of what a social enterprise is and Tim, it’s amazing. It’s just grown like wildfire. There are now more than 40 countries that have signed up for this and they’re running these programs there. From China, to America, to Thailand…it’s amazing. Since 2008 and the global economic crash, people are looking at how they can put capital to work in different ways, which are more sustainable to solve developmental needs.
In the South African context, we have a high unemployment rate of young people, but we’re putting a lot of money into the education system. Many people wonder. This is a relatively wealthy country. Why do you think it’s so difficult to create opportunities for young people? Obviously, you have this program that you’re running. It’s making some impact but it’s not as great as one would like to see happen. What do you think we’re doing wrong in South Africa?
That’s a tough question, which I can only answer from my limited perspective. I’ve been in newsrooms for two decades, and you and I may have had a perspective there from what happens in a newsroom as a gathering of information and opinion. From that, including some of the work I’ve done in society as a social entrepreneur, I’m rather sure that the nexus between policy, the market, and society is something we think exists. There isn’t enough overlap and intelligent debate between practitioners, policy developers, and capital. They tend to come together, kiss the right babies, shake the right hands at the right events and soon after, go back to their own worlds. If we don’t find a way to get those three to overlap significantly in terms of practice, I think we’re going to struggle for a long, long time. It happens in the dust of reality and not in boardrooms.
Give me an example of what you mean by ‘in the dust of reality’. Obviously, rural villages, the townships etcetera… How do people connect with that nexus, which we think exists?
Again, I’m speaking from the limitation of one organisation, but in my experience, it starts with an individual. We know that large-scale donor aid across the world hasn’t brought about the impact and the change that we necessarily want to see, but look carefully. Go back into programs, organisation, and companies that have truly worked. Generally speaking, you’ll find an individual or a group of individuals that have started something and made it work. Policy can facilitate but in the end, it’s individuals. South Africans, right now, men and women, are considering ways of engaging in small-scale or something a little larger, partnering with somebody else who will change this country that we know and the world as we know it. It’s backing individuals. It’s finding people with the right thinking, the right mindset, and not giving them everything. Very often, they’re not saying, “Give me a pair of crutches. I can walk. Perhaps you can lead me to another step. Maybe I need a small bit of capital to get me to the next step – to take the next step. Maybe I just need a signature on a piece of paper, so I have a contract”. Individuals are the ones who change the world.
Are there any success stories that you’d like to highlight?
There are so many. One entrepreneur we know of…her name is Lauren and what she came to us with about five years ago, was an idea to ‘green’ schools. Under apartheid, trees were stripped out when these schools were put in, in our townships. She came back and said, “I want to reforest”. We said, “Great. What’s your enterprising idea?” She said, “I’ll sell banks of trees to companies who require it to meet their targets and I’ll educate young people around caring for these trees. In addition, I’ll sell them the GPS code to what their trees grow”. She’s called Green Pop. She’s turning more than R5m per year. She’s operating in South Africa, gone to scale now, and working in Zambia.
How long ago did the business start? It’s a very interesting idea, though. One wouldn’t think that growing trees could become a business idea.
In addition, doing it in parts of South Africa where there’s a genuine need. In some of our townships, trees just don’t exist and she’s turned it into a business. She came to us about five years ago. I can’t remember exactly when she started before that. We backed her from about five years ago.
As far as LifeCo Unlimited is concerned, where to from here? You have this new deal with IDC and Standard Bank – R32m support – but you’ve been going on with your programs. I believe you’re dreaming big.
We are and we know there’s a big job to be done. Our contribution’s a tiny drop in the big development ocean. What we’re doing right now is speaking to a range of organisations. In fact, as a partnership we’re speaking to USAID as part of the YALI initiative, which is Barack Obama’s African Youth Initiative – Youth Leadership Initiative. His administration has identified about 1000 young people from across the continent who’ll come together as leaders to be grown and invested in, in terms of the whole spectrum of what young people are engaged in and concerned with today, including entrepreneurship. What we’ll be doing is bringing out classic programs and our capitalising of these individuals through that program is very exciting. We’ll be announcing that in more formal detail in a week or two.
All right. Where can young people who are interested in your programs, go? Can you give us that address again?