Prototype Day, 2015

Every Small Business Development Volunteer in Nicaragua shares one work activity in common: entrepreneurship education in high schools. In Senior year of the Nicaraguan equivalent of Home Economics class, the curriculum is based solely on entrepreneurship. However, many of the teachers do not have business experience, so Peace Corps Volunteers team up with these teachers to help them teach the course, in the hopes that they continue doing so effectively after we leave.

The class is part theoretical, part practical. The practical aspect involves the students, in groups of roughly six, developing and selling a product or service. Step one is helping them think of a good product or service. And this can be difficult. The product needs to be new to the local market and can’t have alcohol or tobacco or be an arts and crafts. The students also need to package them and sell them, so they need to keep accessibility of packaging and costs in mind. Lastly, the products need to reflect the abilities and skills of the students. One group told me they wanted to make a ruler that transformed into a triangle. It’s a great idea, but seeing as none of them knew anything about plastics or mechanical engineering, I had to help them come up with another idea.

Taking all of these requirements together, sometimes it is difficult for the students to come up with a good project. At the beginning of the class we spend a lot of time on creativity, production, and idea generation so that they students can think of their own ideas (and with some of my teachers this year I identified that as a deficiency that we are going to work on next year and in my teacher trainings). And sometimes, the teachers and I let the students slide through with a crappy product, just for the purposes on moving along and letting them have something that they can work on for the rest of the year.

Around May/June, after all of the idea generation and design, it is time for the student groups to present their prototypes. And my last class (I am working directly with 10 sections this year) presented yesterday. Here is a list of the products this year:

• Insecticide
• Coconut hand soap
• Caffeine free coffee made from soy beans
• “Pink Sauce” – a ketchup and mayonnaise based sauce for sandwiches, snacking, and sauce bases (the only product that I did not try this year)
• Coconut candles
• Piña colada yogurt
• Fish prepared like Nicaraguan chopped meat
• Carrot chips
• Natural grains-based drink with lots of iron for people with anemia
• Hibiscus jelly
• A machine to cut styrofoam (one of my favorite products of the year)
• Seasoned breadcrumbs made from plantain
• Mango cake (dry – the cake at a party that one person eats a sliver of and the rest just sits there all night)
• Solar cellphone charger
• Hand soap made from guanacaste (a type of tree) seed pods
• Milkshake
• Natural cream for stretch marks
• Syrups for Nicaraguan style Italian ices
• Yogurt for diabetics
• Perfume made from ginger (it smells quite nice and nothing like ginger and is one of the products this year that I see the most potential in)
• Coffee yogurt
• Ready to throw in the blender packages of fruit for smoothies
• Hair gel made from flax seeds
• Japanese style face cream made from rice
• Dual-headphone splitter
• More gel made from flax seeds (every year tons of group have this idea and think they are blowing everyone’s mind with something innovative)
• Paint made with wheat flour
• Condensed soy milk
• Anti-inflammatory skin gel made from eucalyptus and coconut oil
• Waste-paper basket in the form of animals
• Carao milk (Carao is a native plant with a long, wide seed pod that has a paste inside that contains very healthy properties. Milk mixed with this syrup tasted pretty good and this is one of my favorite products right now.)
• Tortilla-flattening machine (this one has great potential too)
• Carrot sucking candy (I think it is still stuck in my teeth, one day later)
• Chocolate for diabetics
• Lalosla-Nica (worst product of the year award. The product is indescribable and this is the name that the group came up for the company. Basically, it is soggy tortilla nachos.)
• Stuffed tamales (tamales in Nicaragua are quite different from Mexican tamales, and I’m not always a fan, but these came out pretty well)
• “Appel Jelly” (yes, that’s how they spelled it)
• Fried chicken wontons (these were excellent and it seems like the group is already working on a plan to preserve and sell/distribute the product)
• Carrot candy bars (these were also excellent – the hit of the class in fact)
• Cream to take away skin-spots (I’m not convinced)
• Another insecticide
• Another body spray/perfume (their teacher thinks they just bought it)
• Fruit smoothies with chunks of fruit
• Cacao ice cream (was good up until the moment I actually tasted it)
• Cramelized fruits (tasty)
• Flour to make crepes
• Vapor rub (when I asked the group why I should buy their product instead of the competition, they had no answer whatsoever. Uphill battle for this one.)

This group decided it would be a good idea to present with one group member wearing his backpack and headphones, and another texting during the presentation

 

My best friend on Prototype Day

There are plenty of groups that don’t bring a product on the designated prototype day. Or they have a severely underdeveloped product/idea. Some of these groups suffer from lack of cohesion and/or motivation, but I’ve also gotten some eye-opening reasons when talking to these groups. In one group, the only girl in the group is the real anchor, pulling along the boys. They didn’t bring anything. When I asked her why, she said it was because her baby was in the hospital for the last two weeks. Another group (same school and section) told me they had difficulty meeting up because two of the girls are young mothers as well. And in a different school in just one group there is a girl who has a newborn baby, and another girl is on indefinite bed-rest because she is underweight and due in a month. That can certainly complicate things when you have a group school assignment to work towards. These were never issues that I had to deal with in high school. And in another school, my teacher-counterpart banned clapping after the presentations, because that’s unprofessional and only something we do for Jesus (he is a devout Evangelical Christian).

The students are also slightly obsessed with giving their products English names. Usually they just translate the product description into English. This has given us gems such as “Gel for Hair,” “Rice Cream,” and “Appel Jelly.” One of the perfume groups wanted to call their product “Mist,” but somehow they got Mist confused with “Mits.”

Going into the prototype presentations I knew that a lot of the products, as they were, weren’t quite what we are looking for. Some groups take the opportunity to create a product and simply prepare food, not thinking about the realities of food processing, packaging, and distribution. Nicaragua is chock full of micro-batch food producers that sell out of their homes or out on the street, door to door. I can hear women (and just a few men) walking up and down the street all day yelling “Tamales! Tortillas!” or “Frescos! Pan!” And they purposefully yell in an elongated nasally voice so that it penetrates into peoples’ homes. “Tamaaaaaaaales! Tortiiiiillaaaas!” Next time you see me, ask me to do an impersonation. The Nicaraguan economy does not need more of these producers, nor are they exhibiting entrepreneurial best practices (although they are certainly entrepreneurial).

Appetizing?

I will give an example of what I would consider a bad idea on the part of a student: smoothies. A lot of groups want to make smoothies. First of all, I don’t find them very creative at all. Throwing peanuts in or topping it with chunks of fruit really hasn’t blown my mind yet. But secondly, smoothies are a nightmare to preserve, package, and sell. The students don’t have the money to rent a storefront in the center of town, so they need to make them in their homes. If you make a batch of smoothies and freeze them they will turn to rocks, and if you put them in the fridge the ice will melt and you will be left with goopy juice.

Smoothies are simply a no go in my book. And the challenge in advising a group with a crappy product is two-fold. On one hand, you don’t want to tell them to just change their product, because then they will basically shut down for the rest of the year. They aren’t going to invest the time in coming up with a brand new product, plus they would have to re-produce all of the work that they had completed up until that point for the new product (feasibility study, SWOT Analysis, Mission/Vision, etc.). And on the other hand, you can’t tell them to look for ways to change the product, because without guidance they unfortunately do not get very far.

Last year, when I encountered products like these, I would simply tell the students to “investigate other ways to package it” or “think about ways to distribute the product.” But for the most part, Nicaraguan high school students do not operate in that manner. They need clear cut instructions and suggestions, and a firm timeline, or nothing gets done, especially in a group setting. This year I had a plan for all of the smoothies, peanut butters, and “all natural” face creams made from Vaseline. I partnered with the agro-industry and entrepreneurship professor from a local business university to work with his students. We planned an array of activities with his students:

• I would work with agro-industry and marketing students on how to give presentations and consultations on their fields of expertise
• They met with my teacher training group and gave them a presentation on value added production and how to teach it to their students
• The student groups of the teachers in my teacher training group will compete at the university’s entrepreneurship competition on August 30
• They initiated formal consulting with my fishing cooperative at Poneloya
• Giving presentation to all of my high school classes on value added production, and informally consulting all of the student groups

Working with the university students has been a challenge, but I think it has been rewarding for everyone. Sometimes they exhibit the same frustrating behaviors and thought processes as my high school students. But we have made great progress, their professor is very pleased, and their work so far with my clients and students has been great. We even came up with a methodology to “back-up” from a final product and create a superior intermediate product (think cake mix instead of cake itself). The methodology, as well as a lot of the focus with the students, is on food, drinks, and other “organics,” but that is simply because 50%-80% of my students come up with those types of products anyway. I’m just as happy, if not more happy, when a student great innovates a non-food item, a service, or something industrial in nature.

1. Start with a final product (like a smoothie)
2. Think about the product in terms of it component parts (fruit, sugar, ice, etc.)
3. Instead of marketing the final product how can we take the component parts and preserve them for a longer period of time (preservatives, refrigeration, dehydration, etc.)
4. Finally, how can we take this intermediate good and package it to ensure that it stays fresh and can be distributed for sale

Aaron, plantain chips model

One concept that I like to stress in class and through all of my work is the importance of value-added production for the Nicaraguan economy. We hear all the time in America the importance of manufacturing jobs. It is the same thing here. Before the Revolution Nicaragua did have some production. There was even a light truck called the Pinolero produced in Nicaragua. However, the country’s manufacturing base was destroyed during the Revolution, and for the most part it has not returned. The Nicaraguan balance-of-trade is extremely lopsided towards importing. Even basic processed foods, which could be made in Nicaragua because of an abundance of crops, are typically imported. One infamous example are the ubiquitous plantain chips (very tasty and popular). Nicaragua is bursting at the seams in plantains. So rather than making the chips themselves, the Salvadoreñans buy up the harvest, truck them up to El Salvador, make the chips there, and then ship the finished good back to Nicaragua. That is a very economically wasteful arrangement on Nicaragua’s part.

The value of the Nicaraguan Cordoba to the US Dollar. No bueno.

As a result, the Nicaraguan currency is constantly losing value against the dollar, and the country is accumulating debt, not income. The capitalistic response is to produce more internally, and I like the teach the importance of  production to my students (and of course stress it to the teachers that I work with). One of the reasons that I like working with the fishing cooperative so much is because they actually are engaged in value-added production. Basic food items are fairly cheap and easy to transform (unlike woods, metals, and plastics), so naturally, foods and other “organics” like cosmetics and creams are popular among the students. And that is fine with me. However, as I’ve mentioned, they don’t have the vision to process an intermediate good that can be packaged and distributed. Instead they gravitate towards the final consumable goods, like smoothies or nachos. I assume this is because they are less familiar with and accustomed to the intermediate value-added goods. Some of these kids don’t even have refrigerators in their homes.

The groups that presented to me yesterday were the most combative. I guess it is just the school culture (I’ve definitely noticed differences among the schools, and incidentally that school is named República de Cuba). Every suggestion or criticism I gave they argued with me (and looking back on it now, I think that’s great, even though it frustrated me and my counterpart at the time). The tamale girls were indignant when I suggested they look into packaging their tamales for distribution and sale. Tamales are steamed in plantain leaves (they are made in corn husks in Mexico) and get soggy and cold after only a few hours. If you want to eat them later on you will have to steam them again (I suppose a microwave may work, but even fewer Nicaraguans have microwaves than have fridges). The leader of the group told me that she would be proud to sell tamales on the street, because her mother is a mobile tamale saleswoman (door-to-door street sales is a sign of poverty in Nicaragua).

They were completely missing the point. Door-to-door street sales(usually)women are poor because they are not providing a lot of added value to their clients and the physical nature of their work makes it difficult to mass produce and access a lot of people. Sure, someone who sells breakfast breads in the morning (known here as cosa del horno – “oven thing,” and sopa de leche – “milk soup;” I have no idea why these names stuck) buys the flour and makes the bread, then brings it to you, but the real value-added processing is in the grain milling and the milk pasteurization. Plus, their product will get stale in a matter of hours. Someone could just as easily buy a quality product at the supermarket that lasts longer. Really, these women are simply earning a “convenience tax” for doing the baking and bringing it to their clients’ doors. And they are constrained by the size of their ovens and how far their feet will take them. Not to mention an abundance of competition keeps margins extremely low. I had to explain to the tamale girls that they could be a lot more successful with just a little more innovation. I think they will at least take the idea home with them, whether or not they act on it (the good thing is, the university students will be meeting with them in two weeks, and hopefully that experience will stimulate some more thought in the girls).

Using the value-added production “back-up” methodology we have helped a lot of students groups. One of my milkshake groups is now going to produce a milkshake mix instead of the milkshake themselves. The consumer will just need to add ice and/or ice cream (plus have a blender). And all of the student groups have gotten informal consultations from the university students on everything from packaging and preservation to marketing and ingredients. I’m happy because the products are better, the university students seem to be enjoying the experience and learning, their professor is happy because the new experience is helping his students, and my teacher-counterparts are happy because they are a competitive bunch and they think that they will now have an edge come the entrepreneurship competitions in October.

Now that all of the prototypes have been presented, the next section of the curriculum is marketing. The groups will execute a market study, keeping in mind the profile of their perspective clients, and using this information, create a logo, slogan, and packaging for their products.

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