SEASON 1: EPISODE 10 TRANSCRIPT

Investing in Others

Dr. Kim Tan: When you have money, it's just easier to give money and write checks. I could write another charity check, but it wasn't going to make any difference. I got to change that. And what is difficult to do is to give my time. So it's, how do we persuade more talented business people to use their gifts and their talents and resources beyond just building our own empire and making a living for themselves and their families, but now to use that to tackle some of these social problems?

Dr. Greg Jones: Our world is facing significant challenges. And at every turn, another conflict seems to await, yet we survive, we overcome, we even thrive by relying on an intangible and undeniable gift; hope. It fills us, connects us, highlights our individual purpose, and unites us in the goal to do more together. Hope fuels us toward flourishing as people and as a community. My name is Greg Jones, President of Belmont University, and I'm honored to be your guide through candid conversations with people who demonstrate what it really means to live with hope and lean into the lessons they've picked up along their journey. They are the Hope People.

Today's agent of hope is Dr. Kim Tan, a successful biotech entrepreneur, global impact leader, and dear friend who's an advocate for social innovation and social impact investing to foster enterprise solutions to poverty around the world. With successful projects throughout Asia and Africa, including the Transformational Business Network, Kim shares the importance of character and leadership, the role education can play in inspiring creativity and problem solving, and the power of creative solutions to complex problems.

I want to have you share with listeners something of your story. You were born and raised until you were in your teenage years in Malaysia and then went to England and went off to university, studied chemistry through a doctorate and a postdoc, and then founded a company that was very successful. And after you sold it, you started doing philanthropy and was dissatisfied. Talk about what that journey was like and how that became a pivot in your own life.

Dr. Kim Tan: So I did biochemistry and then my PhD and post doctorates were all around biochemistry and stem cell and all those wonderful things around oncology. But I bailed out and started some biotech companies and then ran a biotech VC fund. I'm very happy doing it. I still love the science and so on. But on a trip to South Africa, I just became disillusioned with my own philanthropy. We spent half a day in the largest township just south outside of Cape Town, called Khayelitsha, and I could write another charity check, but it wasn't going to make any difference.

So that was the beginning of a kind of Damascus Road moment for me to say, when you have money, it's just easier to give money and write checks. I got to change that and what is difficult to do is to give my time. And what is most needed is actually my time, my expertise in terms of building businesses. So that was a journey, moving out of biotech venture capital into what I then call social venture capital. Can you use a venture capital approach, a disciplined venture capital approach to intentionally build businesses among the poor that addresses poverty, that addresses social problems, that addresses environmental problems?

And resulted in me buying 40,000 acres of degraded farm land in the middle of South Africa to see if we could restore and rewild the land, to see if we could then bring big game into the park, and build a five-star lodge on it and use an ecotourism approach to fund the conservation, the restoration of the land, and create real jobs for the young people in our communities. And I then discovered that the whole issue of the environment is actually a human problem. Environment is not a problem. It is very happy if we weren't around. So unless we resolve and tackle the human problems, we're not going to be successful at tackling the environmental problems.

Dr. Greg Jones: That project in South Africa has been highly successful. It's created jobs and yet beyond the conventional metrics that might be used, you broadened those metrics to look at how people are really flourishing and ways to measure whether families were going to have the kind of multiplier effect impact. Talk a little bit about how you began to measure the social impact.

Dr. Kim Tan: So as a small business, you don't want anything too complex and complicated in terms of the metrics and measure. So we ask ourselves, what are the most important metrics that are meaningful, that are relatively easy to measure so you don't have to bring consulting firm in to do all that for you? So for us still to this day, 20 years on, to me the most useful metrics to measure is how many have three meals a day? Or how many have two meals a day? We can build wonderful schools and so on, but if our kids are turning up to school on one meal a day, they just won't develop. So early on that became an important metric and to this day, some of the businesses that we are engaged in, we're measuring how many have two meals a day still. So that is easy to measure and really meaningful, and we're not even going to get sophisticated about what's the quality of nutrition and so on. That's the next phase.

Another one that is useful for us to measure, and fairly easy just from the accounts, is what's the average salary that we are paying excluding managers? Because I can make more profit by exploiting my staff and my employees. So are we paying a reasonable wage and is the average wage rising over the years? Because that's what we are there for.

Another really important one is to track how much taxes we pay. The problem that we have in Africa is that we have a very, very small tax base. It's only a very small percentage of the people who are actually paying taxes because the majority of the economy is in the informal sector. Nobody pays tax. So you've got a very low tax base, you can't run your schools, you can't build roads, et cetera, et cetera. So part of the conditions for coming to work for us is we all pay our taxes and we can have a long discussion about how wise our governments use our tax dollars, but if the government doesn't collect enough taxes, the countries just can't progress. So that's another important metric.

And then another one, I would say, is probably we track how many send their children to tertiary education. Tertiary education requires the parents, the staff to start learning how to save and start saying that, "My daughter's tertiary education is worth investing in." And that's a big step. Maybe I'll send my sons, but my daughters maybe not. So especially women going to college education, because in one generation they can transform the economics of their family.

Dr. Greg Jones: That's great. You've got projects in Sub-Saharan Africa and Southeast Asia, all around the world that's having great impact. One of the things that I admire so much about the projects you engage in is that you work among the poorest of the poor. So you're not going to the fields where the fruit are already ripe for the picking. You're going into some of the harder areas and challenges. You talked about education. Talk about the NewGlobe Education and the Bridge Academies and the impact that you're seeing across Sub-Saharan Africa.

Dr. Kim Tan: So these two founders, Shannon and Jay Kimmelman, went traveling around the world after they sold their business here in the US and landed in Nairobi in the Kibera slum, the largest slum in the whole of Africa. And Shannon had been a teacher and spent some time teaching in China as well. They just felt they want to try and see if they can address this problem of education in the slums, what can you do? And the traditional route has been charity-based schools and so on. So they wanted to take an enterprise approach.

And they basically came up with a model where the curriculum is all on tablets and it's scripted and parents pay $5 per child per month. We build schools to a budget of $30,000 to $40,000, so these are just corrugated iron type schools. And by using technology and by using mobile money to pay, we cut down all the costs of the back office and that's why we can then deliver this. We gave them some funding alongside some others as seed funding to go and build the first few schools. And then Pierre Omidyar came by from eBay Foundation and he got it straight away and saw that it could be replicated and scaled. So from one school in 2009, today Bridge, NewGlobe schools have 5,000 schools with 2 million primary school kids in school. And it's still growing and it's just creatively thinking about how to solve a problem using an enterprise approach rather than the traditional charity approach.

Dr. Greg Jones: That's amazing, the impact you're having on the 2X improvement in learning among those kids. It's just extraordinary. There's a lot of creativity among young people and yet so often our education systems actually teach people how to become experts in a silo rather than actually able to work together. You talked about character, you talked about the skills, about the imagination. What would you hope education from K12 all the way through higher education would be inspiring people to be able to see and to instill that kind of hope that might lead to future projects worth investing in trying to find those creative solutions to complex problems?

Dr. Kim Tan: The days in which we are people who just impart knowledge to students, I think those days are over. There's so much knowledge available out there, online, ChatGPT can write you an essay. So what we are looking for, I think as employers, are really students who can do problem solving because problem solving requires you to understand the fundamentals of your subject, but also wants you to be creative to solve problems. So I think what we are seeing beginning of a trend is more and more around project-based learning where they're being asked to be creative, imaginative in solving problems.

Dr. Greg Jones: And part of that also is linked to having the character to solve them in teams and to work well with others and the kind of things you look for in those entrepreneurs.

Dr. Kim Tan: Correct. Correct. So we don't want them working in isolation. They need to learn how to work in teams. So problem solve together, project learning in small groups.

Dr. Greg Jones: Which cultivates that humility that you look for-

Dr. Kim Tan: Wonderful.

Dr. Greg Jones: ... in leaders. That's great. The projects that you invest in and support are for-profit businesses, not aiming to maximize the profit, but to achieve the social impact but also to be sustainable. And I've heard you talk about your audience being frustrated philanthropists and repentant bankers. We see a lot of good intentions that don't have the impact. How did you develop that model and what do you look for in leaders of the projects that you invest in?

Dr. Kim Tan: So in the venture capital approach, what we see is the way we do it is we look at a project and we decide how much money do you need and how long do you need to get the profitability, right? Okay, you need $1 million, you need five years. Well, that's fine. If we believe in the business plan, we'll reserve that and we will come and support you, invest in you at a series A and a series B, because unless you give businesses enough fuel in the tank, they're never going to get lift off. And a lot of businesses just are under capitalized, don't have enough cash given to them to get to profitability. And this is why we have a lot of these crash and burn type pictures of businesses because they just run out of fuel.

So the VC kind of approach is a more disciplined approach. Doesn't mean that we always succeed, there will always still be failures for a number of reasons. The key thing that we say again and again in our approach is that we are investing in people, is people, people, people. Because business plans will fail. We don't spend a awful lot of time on the numbers because numbers are always going to be wrong. They'll be wrong within a month of it being printed. So we are investing really in the people, in the team, in the entrepreneur. And there, the character piece becomes really, really important. So we are looking for competency, we're looking for hard work. It is very, very hard work. We're looking for honesty, integrity because Wall Street crash was brought about by very intelligent people, very hardworking people, but maybe without the integrity. So if you don't have integrity, these people will destroy your firm.

But the fourth element that we look for is really humility. It's almost the most important virtue out of all the character that we look for. Why? Number of reasons. One, I think pride kills, pride kills relationships, pride kills businesses. The other reason is that we, at some stage, will have to say to the entrepreneur, running a business with five people is very different to the business running with 50 people to 100 people. At some stage, you've got to be humble enough to step aside and allow professional managers to come in and take the company forward. So, the humility piece is almost the most important, I would say, that we try and gauge.

Dr. Greg Jones: That's so important and such a great marker, particularly when you're focusing on social impact. One of the hallmarks of the work that you do in social impact investing is finding creative solutions to complex problems. And one of my favorite projects where it would seem like there's a very difficult problem that would be very hard to solve, particularly with a sustainable business, is sanitation in the slums, say of Nairobi. And you've got a project, From Poo to Protein, that's provided a creative solution.

Dr. Kim Tan: Yeah, I think Sanergy is the name of the business. I think it's almost a second or third investment in Kenya. So this is a model where we franchise toilets to micro-entrepreneurs. So there are currently about 4,000 of these toilets in Kibera slum serving about 140,000 people every day.

Dr. Greg Jones: Wow.

Dr. Kim Tan: So social impacts is great, but if you look at it economically, it's terrible business, just not going to be profitable. So the only way to make it profitable is to take the waste away to convert into organic fertilizer and sell the fertilizer. And the other product is an insect protein. This is a black soldier fly that lays their eggs on poo and we then harvest the larvae and use it as a protein substitute in animal feed. And that's becoming a really high-value product.

So it's converting the poo that we collect and turning it into protein. So it's a mixture of waste now, and it's a real circular economy. Everything goes back into the food chain, either through animal feed or through fertilizer. These are a couple of guys who are MIT students, David and Anil, they just wanted to go and pilot this and it's gone through so many iterations as well. So it's having capable leaders who will listen to other fellow directors and advisors and it's got to this stage where they're now successful. And it's probably the second-largest insect protein factory now in Africa.

Dr. Greg Jones: That's great. Just the virtuous spirals that result from that are pretty extraordinary. You have 40+ projects that you're investing in yourself. And then in addition to that is if you didn't have enough to do in Sub-Saharan Africa, multiple countries, and Southeast Asia, and being involved at your alma mater at the University of Surrey, you also started the Transformational Business Network. Talk about why you started that and what its characteristics are.

Dr. Kim Tan: I started that because when I started the Safari Game Park, I knew that there was a certain bias towards Africa. When you think of Africa, people just think about AIDS, poverty, corruption, and so on. But if you think about, and when you mention China, they're thinking investments, or Singapore they think investments and so on. So there's a clear bias and I thought the only way we can change hearts and minds is a movement. I can't do it on my own. We need a movement.

So that's why we created the Transformational Business Network. So TBN, as you've said, is really a network of disillusioned philanthropists like me and a repentant banker like me. And what we are trying to do is really to get people to come on journeys with us and see and smell the poverty. And then use the talent and resources they have, identify some small businesses on the ground, and see if we can wrap a better, more robust business plan around them, put in some mentoring time, put in some management time and so on, and help them to grow to scale.

So the picture that I have often is if you have a slum, you can put 10 NGOs in there and in five years, you might see some changes with these 10 NGOs and they will do good. But if you had 10 businesses in there and each of the business employs say 50 to 100 people, I think there's a higher chance that you will see change and see transformation in that slum. So it's how do we persuade more talented business people to use their gifts and their talents and resources beyond just building our own empire and making a living for themselves and their families, but now to use that to tackle some of these social problems?

Dr. Greg Jones: In the last year we announced a TBN Alliance that Belmont is involved in. What are you hoping that Belmont can contribute to the Transformational Business Network and this broader movement of social impact investing?

Dr. Kim Tan: We just think that the time has come for the movement to have a bit more structure. And so with a grant from the Templeton Religion Trust, we are grateful to Belmont agreeing to become a secretariat, to be based here, to help coordinate learning from each of these chapters and then to provide a single landing page on a website and to be the repository for all the resources, the videos, the opportunities, the job opportunities, investment opportunities for all these different parts of the TBN network. And then to do some storytelling, we've kind of operated under the radar and we've not been great at storytelling. So part of the grant is to have a budget for storytelling. We have some great stories of these entrepreneurs on the ground and they need to be told.

Dr. Greg Jones: Yeah, we're honored to be involved in helping build that network and to do some of that storytelling. I want to ask you, you're such an inspiration to others. Who do you turn to for inspiration or who are people that inspire you?

Dr. Kim Tan: I think different people have inspired me in different fields. I think in the early days of science, it would be, I would say someone like Fred Sanger, who most people wouldn't know, but Fred Sanger is a double Nobel laureate. He was the first one to give us a sequence of insulin, got a Nobel Prize for that. And not being contented with that, he then went and developed a whole technology for sequencing the nucleic acid for the DNA of insulin, for which he got his second Nobel Prize. And it's Fred Sanger's contribution that has given us the biotech industry.

And I remember being a young PhD student presenting a paper at Cambridge on my meager study on insulin and I was told in the audience was Sir Fred Sanger and I was terrified. But he's the most gracious, gentle, quiet man. And at the end, I've only ever once asked for an autograph. It was from Dr. Sanger. So he was someone that, there's a humility about him and Fred was just so gracious. I just loved that. And clearly inspiration from people like Nelson Mandela. South Africa could have been an absolute disaster but for his ability to lead a nation to learn to forgive.

Dr. Greg Jones: It's beautiful.

Dr. Kim Tan: I mean what an incredible guy. And then there are some other amazing Christian leaders I think that I draw inspiration from, people like Bonhoeffer. So yeah, there are lots of these heroes in different fields.

Dr. Greg Jones: Yeah, two Nobel Prizes isn't bad for-

Dr. Kim Tan: Not bad.

Dr. Greg Jones: That's pretty good. I want to close with a question. You interact with lots of people from young kids to students in university to investors and you inspire a lot of people. What advice would you have for somebody who listens to this podcast or gets inspired, wants to do some work to make the world a better place, to be an agent of hope, to become involved in one way or another with social impact investing? What are some next steps or advice that you'd give?

Dr. Kim Tan: Go and find people who are inspiring. I got inspired to do science because in my third year, we go out into industry to work and have a whole year of experience. And I happened to be in the Medical Research Council lab in London and during coffee breaks, Greg, there were all these old guys and they were telling stories about how they put tubes together, plumbing together, and these are Nobel laureates. And as a youngster, I just sat there and I thought, "I really want to do science."

So it was being inspired, I think, by others who were inspiring and getting a bit of that rubbed off on you, that will then inspire you. In the social space, it's exactly the same. I think just go and work and intern with people who are already doing all this kind of work. And this is why one of the things that would be great to facilitate your students is to get them to spend a week or two weeks in some of these enterprises, get them inspired. That's the best thing to do is to go and work and spend some time with people who are inspiring.

Dr. Greg Jones: That's beautiful. Put in our language; the best way to become an agent of hope is to hang around the Hope People.

Dr. Kim Tan: Yeah, absolutely. You're right. They will rub off a bit of that hope on you.

Dr. Greg Jones: Thank you for participating in this conversation with The Hope People. Our aim is to inspire you to become an agent of hope yourself and to help us cultivate a sense of wellbeing for all. To join our mission and learn more about this show, visit thehopepeoplepodcast.com. If you enjoyed this conversation, remember to rate and review wherever you get your audio content.