125 Stanford Stories

NO. 49

Seed: Fighting poverty with entrepreneurship

Minds meet and connections thrive at Stanford Seed’s East and West Africa centers

When entrepreneurs in Africa need advice on scaling their companies, they can turn to a source both far away and close at hand – Stanford Seed, the Stanford Institute for Innovation in Developing Economies.

Since 2011, Seed, an initiative led by Stanford Graduate School of Business, has helped more than 150 African businesspeople grow their firms and adopt new strategies. Seed’s West African center opened in 2013 in Accra, Ghana. In May 2016, Seed expanded to East Africa with a second center in Nairobi, Kenya.

Creating just one job in a developing economy fosters the indirect creation of seven to 25 more jobs, according to World Bank statistics. Stanford Seed aims to end the cycle of global poverty by helping Africa’s most promising small and mid-size companies expand.

Stanford business faculty and volunteer coaches travel to the African centers to share their expertise with African entrepreneurs chosen for the 12-month Seed Transformation Program.

“We see — in the leaders we admit to the program, and in their companies — enormous potential for growth, innovation, and employment that can improve the lives of the poor,” Seed executive director Jesper Sørensen, a professor of organizational behavior at the GSB, said in 2015.

The participants are successful business people who face common problems, “for example, how to go from a firm of 50 people to a firm of 500 people,” said John-Paul Ferguson, assistant professor of organizational behavior at the GSB.

Tara Fela-Durotoye, a Nigerian lawyer and beauty-industry CEO who completed the Seed Transformation Program, said “Seed came to us and said, ‘We want you to scale because we want you to impact your society in order to alleviate poverty.’”

With Seed’s guidance, Fela-Durotoye increased her store locations from nine branches to 22, tripled the consultants who sell her products as microbusiness owners, expanded into Kenya and began planning to enter the U.S. and U.K. markets.

“It’s a tough journey,” Fela-Durotoye said. “You have to be ready to stretch.

“The continent needs businesses like ours that can make a difference,” she said. In Seed, “we have a great partnership that will ensure we achieve that.”

Stanford Seed also inspires the next generation of globally engaged leaders by sponsoring on-campus courses and African internships for Stanford graduate students and for undergraduates across the curriculum.

Natalie Gonzalez ’15, an architectural design major, expected to help design a building during her internship with a Ghanaian fast-food breakfast purveyor, Koko King. Instead, she wound up sharing perspective gained as an American consumer. She worked on Koko King’s plan to expand offerings from breakfast to lunch. She also helped the firm set up a loyalty program, a novelty in West Africa that Gonzalez said raised revenue 10 percent in the first week.

“I used skills that I didn’t think I was going to,” Gonzalez said in 2015. “A lot of it was listening and feeling what needs to be done, but also bringing in sort of a different eye.”

Moreover, Seed funds research in developing economies worldwide – nearly $1.8 million for 19 projects in 2015 alone. This research extends beyond management or entrepreneurship to probing underlying impediments to economic growth.

For example, Seed’s Global Development and Poverty Initiative has helped to fund Stanford political scientist Beatriz Magaloni’s research and policy analysis of law enforcement performance in Latin America. The connection: Improving policing will strengthen the rule of law, enhance transparency and encourage democratic governance, all vital to business development.

Faculty who work with Seed say they are energized by the immediate impact they can make.

“It’ll be 10 years before a [Stanford MBA] student is really in a position to implement something they’ve heard here, unless they start their own company,” said James M. Patell, professor emeritus of operations, information and technology at the GSB.

“These guys are doing it the next day.”

Stanford University is pleased to partner with the U.S. State Department and the White House in the 2016 Global Entrepreneurship Summit. The event welcomes President Barack Obama, entrepreneurs from around the globe, and prominent Silicon Valley investors to Stanford’s campus. Attendees will learn groundbreaking ideas and developments in the field of entrepreneurship from leading innovators, while showcasing their own business concepts for consideration and potential collaboration. 

Stanford Seed, the Stanford Institute for Innovation in Developing Economies, gives a special welcome to the Seed Transformation Program participants/entrepreneurs invited by the White House.

The mission of the Seed Transformation Program (STP) is to enable business leaders, based in developing economies, to lead their regions to greater prosperity; while the broader vision of Stanford Seed is to end the cycle of global poverty. The Global Entrepreneurship Summit is perfectly aligned with these objectives and, as such, Seed is delighted to share in this landmark event.