David Auerbach of Sanergy has taken the mic this week, not only to give Andy a vacation after a full year of non-stop podcasting but also to dig into a topic he’s pondering with Sanergy right now. He’s interviewing his old buddy Andrew Youn of One Acre Fund about decision making. But he also covers what led him to start One Acre Fund, how they think about scale and expansion, about failure and how their general partnership co-ownership structure has created the right conditions for leadership cohesion within the organisation.
On this episode you’ll learn:
- Andrew’s path to founding One Acre Fund was studying at Northwestern Business School, working as a Management Consultant, and then Founder of One Acre Fund.
- Andrew feels that being in business school was a safe place for him in which he could experiment with entrepreneurship and find out whether his idea is promising enough to turn it into a full time job. The same was true for David who started Sanergy while at business school, and felt that if all fell through, he still had an MBA to fall back on. He calls this ‘afraidycat entrepreneurship’ ?. Andrew believes you don’t need to go to business school to experiment with a new idea but it can be done whilst doing a full time job.
- One Acre Fund measures themselves against scale, impact and cost effectiveness. They currently have around 7,000 staff, providing services to 600,000 farm families each year, who are seeing approximately 50% improvement in their profitability. But this is small compared to the size of the problem, which they estimate at 50 million small holder farmers in Sub-Saharan Africa that they could support.
- Social entrepreneurship models like those of Sanergy’s and One Acre Fund’s are promising, but they’re currently a drop in the ocean compared to the size of the problem. Andrew believes you should think about the stage of a social enterprise in terms of decades, since you can expect it to be a marathon, instead of a short term sprint, to solve such a problem.
- How a project went wrong at One Acre Fund, of introducing passion fruit to farmers’ crops. It was too complicated, too costly and disrupted their focus. He learnt the lesson to always deliver as much impact to farmers for as simply as is operationally possible, to support scale.
- To avoid rolling new things out without sufficient attention to the impact on cost, operations and scale, One Acre Fund have setup a trial pipeline. In terms of expectations, the team knows that anything that gets tested won’t have any meaningful impact until at least 3-4 years later.
- How One Acre Fund made the mistake in their first few years of over promising to funders, but they’ve now learnt to set realistic targets and routinely beat them.
- The key is to be really ambitious over the long term but not the short term. Instead, be really realistic that short term goals can be surpassed, which also contributes to good morale internally.
- David talks about how Sanergy are approached constantly to expand to new countries, and he wants to hear from Andrew, how they think about expansion. One Acre Fund has four principal expansion strategies. (1) Expansion to support existing operations in a really robust way; (2) expansion to support more families with their existing operations and footprint. (3) expansion within existing countries. (4) expansion to new countries.
- New country growth investigations start with a desk study, then a three month field visit, a pilot with hundreds of farmers, then thousands of farmers.
- We talk about One Acre Fund’s expansion into Rwanda through a government partnership. They look for systems change programs where they can plug into.
- We discuss how One Acre Fund manages differing opinions within the team, and ensures that everyone moves in the same direction. Andrew puts much of the cohesion of the senior leadership team down to nurturing talent from within, despite the temptation to bring in highly skilled international hires.
- One Acre Fund believes they will grow faster when there’s a high degree of ownership amongst the 18 key leaders of the organisation, which is why One Acre Fund is structured as a general partnership. This also helps with decision making, so general partners are trusted and responsible to make the right decision for the company.
- Andrew’s advice for decision making for early stage entrepreneurs is (1) try and (2) patience. “Try” meaning to keep learning and test before moving forward. And “patience” because it might seem slow at the beginning but in the grand scheme of things, scale comes much later. Andrew’s mantra has been “it’s a gift to have a really huge problem when you’re small.”
- Instead of reading many books to learn, Andrew tries to have at least one advisory call each week with someone he’s trying to learn from.
Links to resources
Connect with Andrew Youn