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28 May 2017 16:38 (South Africa)
Politics

Samasource, a cyber solution to global poverty

  • Andy Rice
    andy rice
    Andy Rice

    Andy Rice is a founding partner of Yellowwood Future Architects, a marketing strategy consultancy. In his other lives, he is the southern hemisphere's only supporter of Cambridge United Football Club, and was once upon a time the South African National Spoofing Champion. He has played football at Wembley and cricket at Lord's within the same weekend, but troubled the scorer on neither occasion. Things could only go up from here.

  • Politics
Samasource_Leila Janah

Leila Chirayath Janah was well on her way to becoming another cog in the wheels of multinational big business. Then she decided it was wrong to let the world's poor people's massive talent go to waste.

When the Oxford Poverty and Human Development Initiative and the UN revealed a new way of measuring global poverty, it showed that there were more poor people in only eight Indian states than in all of Africa’s 26 poorest countries combined. The Multidimensional Poverty Index (MPI) created a new way of measuring deprivation and told the world that a third of the world lives in “multidimensional” poverty. Now meet the ivy league university graduate that walked out on a cushy consulting job to do something about this plague of poverty.

“I was in a top-paying job, living in a beautiful apartment in Manhattan and working at Grand Mercy Park. I had a great life,” said Leila Chirayath Janah. She told The Daily Maverick how she chucked it all in to live on a futon in her ex-boyfriend’s flat and establish San Francisco-based Samasource. A company that connects youth, women and refugees to outsourced contracts with global multinationals, Samasource is a new-generation business that uses the latest work-flow processes and cloud computing to provide economic opportunities, employment and training to the poor in developing economies.

With 16 service partners that have created work for 600 marginalised individuals in Kenya, Uganda, Haiti, India and Pakistan in just two years, Samasource is a hopeful alternative to aid systems that have created debilitating co-dependencies in developing regions. It comes as no surprise then to learn that Samasource derives its name from “sama” a Sanskrit word that means equal.

Watch: Leila Chirayath Janah talks about poverty at TED

When she was still a consultant, Janah had a corporate expense account and an American Express card, but happiness eluded her. “Money matters a little bit, but studies on happiness show that after you make a certain level of income that provides for your basic needs, what people really care about is meaning. I didn’t feel I had much meaning when I was spending the majority of my day working to help big American companies get richer.”

The itch that caused Janah’s malcontent developed during a trip to Africa at the age of 16. “I won a scholarship fund from a tobacco company, but felt guilty about using the money to go to an Ivy League school so I joined an online volunteer programme and moved to Ghana.” Teaching blind and visually impaired students in a country were a third of the population lived below the poverty line proved to be a life-changing experience. “That opened my eyes to global poverty. I had seen poverty domestically in the US and had heard my parents talking about what life was like if you don’t have more than a dollar a day, but I had never really seen it. I had previously thought the world was meritocratic and that if you worked hard and were smart, you could get ahead. For the majority of people in poverty around the world this is just not true.”

Photo: Workers being trained in rural Bengal, in India.

The Oxford Poverty and Human Development Initiative and the Human Development Report Office of the UN estimate that 1.7 billion people are poor, and a further 1.3 billion people live in extreme poverty trying to survive on $1.25 a day or less. While in Ghana, Janah saw that poverty could be meaningfully addressed when poor suppliers are connected to wealthy buyers on fair terms to those poor suppliers. However, her epiphany arrived after she had graduated from Harvard and was shipped to a huge outsourcing business in India by her consulting employers, an offshoot of McKinsey. “My ‘aha’ moment came when I was sitting on the floor of a call centre in India. I thought if 12,000 middle-class people can do this out of Bombay, why on earth can’t 12,000 poor people in Ghana or Nigeria or rural India do the same work as long as they have an Internet connection and a computer centre to work from?”

The advent of cloud computing would change the global outsourcing business and enable Janah’s micro-work model to become reality that would link US multinationals to people desperately needing to make money in emerging economies. Before cloud computing, outsourcing largely required people to travel to, and cluster together, in massive work centres. The move to Internet-based computing saw software, resources and information migrate into the cloud which meant dispersed labour models became viable.

Photo: Workers in Kenya.

“The brilliance of the outsourcing model is that for the first time you don’t need a lot of hard inputs to do the work. All you need is a brain, an Internet connection and a cheap computing device,” said Janah. The management of outsourced work has become sophisticated enough to parse small volumes of work out to small units of workers which means that people in remote areas can log into a web-based system to do simple, single tasks worth one or two cents, something that wasn’t possible before the explosion of web applications that manage outsourced work.

Watch: Leila Chirayath Janah talks about the virtual assembly line

It was meeting Stephen Muthee in Kenya during a trip while still a consultant that the business model for Samasource fell into place. Muthee was a University of Nairobi graduate who couldn’t find a job, so decided to create his own fortune. With a bank loan Muthee bought some refurbished computers, hired four students and was doing data entry work on a small scale. “Stephen was sitting in Kenya and couldn’t even get a visa to the US, but knew that all the major contracts were sitting with large multinationals headquartered in London and Los Angeles. He told me that if I could get the contracts he’d recruit talented people in Kenya who were desperately poor, but had an education.” Muthee became one of Samasource’s first business partners and today, two years later the Kenyan-based outsourced centre is 35 people strong.

Janah’s business model for Samasource model is fairly simple. To big business Samasource looks like just another outsourcing company, but there is a stronger focus on account management and work-flow supervision. The big differentiator is the company’s pursuit of social goals over profits. “We run our non-profit like a business in that it is accountable to the people that pay us, but when it comes to our workers we exclusively engage women, youth and refugees. We survey our workers to ensure that they are genuinely poor before they receive work and have special training programmes to help people learn, develop and produce work that is saleable to large US clients.”

The focus on women workers is based on research that shows females spend their money on educating and sustaining their families, and extended families. “As far as youth and refugees go, we care about helping people who are making less than $2.50 a day to increase their income and enhance their skill levels so that they can get computer work elsewhere as well. In developing countries people between 18 and 35 are flooding the labour market and there is very high unemployment among this demographic. When you don’t employ young people, particularly those who are aware of what is going on in the rest of the world because they’re increasingly using mobile phones… When you deny these people the ability to earn any kind of income they turn to crime. In many parts of Africa it is far more profitable for young people to join a rebel group that will at least pay them or feed their families than to sit around hoping for a job that is doesn’t exist. The argument to employ youth and refugees is to give people who would not have any access to jobs some kind of income so they don’t turn to crime.”

Photo: Shift workers in Haiti.

What sets Janah’s model apart from aid organisations is that she’s a social entrepreneur and as such is accountable to the people she’s trying to help. “I have seen a lot of incidents with people in villages who say: ‘There is this aid institution that has come into my village to build a road or a school, but what we really need in our town is jobs. If we had somewhere to work then we’d be able to afford to build our own infrastructure.’ The challenge with aid is that it often creates this two-tiered infrastructure where the people you are trying to serve become second-class citizens and the people who receive and spend the money are the first-class citizens. There is this us-versus-them mentality.” Janah said aid organisations often set themselves up as anti-poverty experts from the west that fly into emerging economies to tell poor people what they need.

“What social entrepreneurship does is to turn that on its head by saying how can we serve people in need by providing them with goods or services that they are willing to pay for or work for? We are accountable to large US organisations for delivering quality work, but we are also accountable to the people who are our workers. If they are not happy and receiving good pay then they won’t do the work that needs to get done so that we can serve our customers. I really like that built in accountability. I think it forces a certain discipline on social enterprise that one could argue that some of these larger aid institutions don’t have.”

Janah estimates the outsourcing industry is worth about $525 billion and that commoditised services like data entry commands some $20 to $50 billion of this market. “What’s exciting is that for the 2 billion people living on less than a dollar a day we don’t have to have a huge share of the market to make a meaningful dent in poverty. We have increasingly efficient ways to pay people who live on less than $2 a day small sums, and it really only takes small sums to push people above the poverty line.”

Janah believes it is a moral crime to be part of a system that suppresses some people economically, while uplifting others. “The greatest natural resource in the world that has been overlooked is the brainpower at the bottom of the pyramid.” This doesn’t view the poor as passive consumers of handouts. “The real way to end poverty is to view the poor as producers of goods and services in the global economy. To see them as people who are capable of contributing in the same way as you or I contribute. The only limitation they may have had is that they live in a country where there is not a lot of infrastructure. I think brain power at the bottom of the pyramid is very exciting and it is a crime to let that talent go to waste.”

By Mandy de Waal

Read more at TechCrunch and FastCompany. Read Leila Chirayath Janah’s column on “Rebuilding Haiti” in Huffington Post.

Main photo: Leila Chirayath Janah, founder and CEO of Samasource.

  • Andy Rice
    andy rice
    Andy Rice

    Andy Rice is a founding partner of Yellowwood Future Architects, a marketing strategy consultancy. In his other lives, he is the southern hemisphere's only supporter of Cambridge United Football Club, and was once upon a time the South African National Spoofing Champion. He has played football at Wembley and cricket at Lord's within the same weekend, but troubled the scorer on neither occasion. Things could only go up from here.

  • Politics

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