What is the hardest kind of capital for entrepreneurs to find in the developing world?
A strong argument can be made that it’s social capital – basically a feeling of trust, community, and mutually agreed upon norms and expectations that together benefit the community. The complete lack of social capital has prevented many incredible entrepreneurs from realizing their potential, and for good reason. Without social capital, investors have a harder time building trust. Transactions that could be simple take forever, and information that should be cheap and easy to find simply isn’t.
A lack of social capital begets a lack of investment capital.
Without social capital, the law of reciprocity – one of the most powerful laws of leadership and getting things done – doesn’t work. Ultimately, where there is little social capital, opportunity and potential are squandered, which is why the societies with the most social capital in the world are also the most successful.
Did we build social capital at our first retreat? I think we made an excellent start, and we did it really only by creating a space and a frame for extraordinary people to realize just how extraordinary they are .
We are told that Central Americans, like many others in countries with significant problems like poverty and crime (in this case, violence indirectly caused by oblivious American illegal drug consumers) have a culture that is anti-entrepreneurial. Overly conservative, distrustful, stratified, fearful of change, afraid to fail, tied to the status quo – these are words that describe parts of the business culture in Central America, there’s no denying it. But as Jose Bolaños, (one of the most inspiring and thoughtful life coaches in the region), said as he wrapped up the retreat, “Here, the status quo has been broken .”
If there is a lack of social capital in Central America, it will not be found among the entrepreneurs I met at our retreat. If there is fear of failure, that fear was not evident. When you are part of a community, you know that you are not confronting all of the challenges solo.
“I realize I am not alone and that together we are more powerful than we are individually,” said Guillermo Jacoby of Ostuma Farms, the most sustainably managed family-owned farm in Nicaragua we know about.
Central America is one of the most unequal, socially stratified places on earth. That is not something you can change overnight. Agora has begun the process of creating a community that can overcome class background — one whose glue is values, not where you went to high school.
In fact, I think we have already assembled possibly the most diverse group of entrepreneurs ever to form one community. One received angel investment from top Wall Street investors; another got her first loan ever – $100 – from a local microfinance bank. Together, Agora and these entrepreneurs are helping to build a new entrepreneurial culture in Central America .