A Discussion on the Future of Entrepreneurship Around the World

Thursday, April 21, 2016
Christopher M. Schroeder

Author, Startup Rising: The Entrepreneurial Revolution Remaking the Middle East; Former Chief Executive Officer, HealthCentral

Elmira Bayrasli

Author, From the Other Side of the World: Extraordinary Entrepreneurs, Unlikely Places; Cofounder, Foreign Policy Interrupted

Katherine Boas

Executive Vice President, Carl Marks & Co.

In conversation with Katherine Boas, Executive Vice President of Carl Marks & Co., Elmira Bayrasli, Cofounder of Foreign Policy Interrupted, and Christopher M. Schroeder, Former CEO of HealthCentral, discuss the challenges as well as the opportunities entrepreneurs encounter around the world today.  The authors consider the rise of startups in the Middle East, the misconceptions people have about the possibility of entrepreneurship outside of the United States, and how globalization and technology have changed the landscape for innovators everywhere.  They also reflect on the future of entrepreneurship in Silicon Valley, and the United States more broadly, and its relationship to the future of entrepreneurship in the rest of the world. 

BOAS: Excuse me. If I could have everybody’s attention really quickly. Sorry to interrupt but we’re going to get started in just a moment, but I just wanted to point out this is a little bit different from other Term Member events. This is actually going to be on the record, so just keep that in mind. We’re streaming it live and it will be posted afterward. So just wanted to let you all know. Please turn off your cellphones too, if you don’t mind. Thanks.

Are we ready? Great. We’re going to get started. So for all of you in the back, just take a seat wherever.

We’re meeting on global entrepreneurship with Elmira—is it Bayrasli?


BOAS: And Christopher Schroeder.

In the spirit of our topic, we’re live-streaming this. So I also want to welcome CFR members and others joining us from around the world. And just another reminder that we’re on the record tonight.

You should have bios of Elmira and Christopher in your packs and online, but briefly, both have written extensively about entrepreneurship and innovation around the world, Christopher in the Middle East and Elmira seemingly everywhere else. Christopher’s book is “Startup Rising: The Entrepreneurial Revolution Remaking the Middle East” and Elmira’s is “From the Other Side of the World: Extraordinary Entrepreneurs, Unlikely Places.”

In addition, Christopher and Elmira and entrepreneurs themselves. Christopher has run several e-commerce businesses and invested in dozens more and Elmira is the cofounder of Foreign Policy Interrupted, which aims to increase the number of women commenting on foreign affairs in the press.

Christopher and Elmira, thank you for being here tonight. I should start by noting that I have a new strategy for finding great books, which is to moderate more CFR panels. (Laughter.) So let’s begin by talking about the books. I’d love to know what inspired each of you to write them.

BAYRASLI: I think for me it was—as the daughter of immigrants from Turkey to the United States, I think there is always this perception about Americans and “the other.” And for some reason, we tend to think everything in America is great, and for the most part it is. I think that that—you know, I think that there’s a reason that America is an economic leader, I think a leader around the world, but I also think that there are—there’s no lack of great ideas, whether it’s in Africa, Asia, Latin America, or the Middle East.

And when we talk about entrepreneurship here in the United States, we automatically think of people like Steve Jobs or Bill Gates or Michael Dell, and we think about the big technology companies out of Silicon Valley. And the minute you say “entrepreneurship” in the context of Africa, Asia, Latin America, the Middle East, it becomes something different. It becomes something very micro. It becomes something that—you know, women doing handcrafts.

And what I was seeing is that while there’s certainly that, there’s certainly women doing handcrafts here in the—in Brooklyn, in fact, but there are men and women around the world, whether they’re in Nigeria, South Africa, Brazil, Jordan, in Malaysia, that are leading really globally competitive companies in all fields, not just technology. Whether it’s in energy or biotech or in health care, they’re really doing very innovative things.

And what I really wanted to do is write the stories of these men and women—how they’re doing it, why are they doing it now—to really shatter the paradigm about what entrepreneurship is and that it can only be done here in the United States.

SCHROEDER: So my journey is not as personal but is actually quite similar in some respects, and it really has been a journey of—of fighting narrative bias is probably the way to say about you. Because I have traveled all over the world, the companies I’ve built outsource technology to almost any growth market that you could name, but the idea that the kinds of things that Elmira just described as happening around the world could be happening in those days in Mubarak’s Egypt was completely off of my narrative. My narrative was the CNN narrative and there was only one thing to say about the Middle East, and that was sort of the end of it overall. And again, I’ve been there as a tourist, I have many friends there, but I still couldn’t believe it.

And I got to know a couple of remarkable men—actually a bunch of people but two men in particular who started talking about how universal access to technology was changing society in the Middle East around 2010. It was around the time, of course, where that young man burned himself to death in Tunisia. And obviously something else was happening at the time but they said: You don’t understand. I mean, all you guys think about is al-Qaida and September 11th. The new generation has access to this technology and they’re doing amazing things to it.

And they put together what was the first real large gathering of startups in the Arab world in the fall of 2010, which they called Celebration of Entrepreneurship. And they dragged me there pretty much kicking and screaming. There’s a guy named Fadi Ghandour, who is really kind of a legend over there, who himself was an entrepreneur. He built Aramex, which is the largest logistics company in the Middle East and Africa now, and a man named Arif Naqvi, who has built Abraaj Capital, who some of you know is one of the largest—the largest private equity fund. And they dragged me over there.

And in many respects, I view my life as before that weekend and after that weekend, because nobody was talking about Israel, no one gave a damn about Obama’s Cairo speech. They were all doing what we all take for granted in New York and Silicon Valley and just building amazing things. It was 3,000 young people from around the region, 3,000 other young people who tried to get in and couldn’t, were on a waiting list. And it was just unbelievably riveting and made me feel like an idiot because I thought I should know better about this.

So I actually extended my trip and I went to Egypt and Jordan and I saw the whole thing over and over again. And on the plane ride back—I used to run the online stuff for the Washington Post and Newsweek, and on the plane ride back I wrote an op-ed about what I saw. And Hyatt wasn’t too into publishing it but at the minute said, well, this is interesting enough; maybe I’ll do that.

And you guys know, all you have to do is write an op-ed somewhere and everyone thinks you’re an expert on the subject. So like the next day, two very moving things happened to me about my reflection. One is I got literally hundreds of emails from the region. I don’t know how the people found me, but they found me just to say thank you for talking about something other than the bombs and explosions and terrorism but the Middle East.

And the other thing I did was I got a phone call from a remarkable man in Mrs. Clinton’s office saying: You’re obviously an expert in this field. We’re having startup competition in January. Would you mind to come judge it? And, you know, I said, you know, I’d like to understand this more. I have plenty of vacation time. And I did. And I was there—if you were paying attention to the calendar—in January 2011. And one week after I was there—well, I was in Syria when Ben Ali fell, which was a mind-blowing experience in and of itself, but then in Egypt every one of the hundreds of young entrepreneurs I met, all as impressive as the last round, of course were in Tahrir Square.

And then at that point I knew that I would start figuring out a way to get this message out, because I think a lot of Americans didn’t understand it and I felt that a lot of young people were doing this in the region. Their parents didn’t understand it. So I thought it was an important story to tell.

BOAS: So, Christopher, you write that if you have one hope for your book it’s that it will inspire people to rethink our conceptions about the Middle East and engage. And you say there’s a Middle East out there that you’ve never heard of and it’s coming on strong. To your point from just now, can you tell us why?

SCHROEDER: Well, let me give it to you in a poignant example and something to think about. And as a businessman, I think about it all the time. And you, in your ambitions, I hope if you remember me for nothing else you will remember me for this, and that is the power of narrative bias.

Now, for all—you know, stories are important. We have to tell stories. It helps us do business plans. It helps us explain to our family why we do what we do. But you can get caught very, very simply and make profound mistakes in so doing it. So to put it in perspective, in December I was in Cairo, Egypt at a large startup gathering of over 5,000 young people who were just doing, again, the same kind of things that I talked about before. Elmira was there with me in a similar one in Istanbul.

As interestingly, 24 hours before that one in Cairo a different 5,000 young people were gathered in Beirut, Lebanon. Now, I can assure you that if 10,000 young people were gathered in the Arab world to talk about the Muslim Brotherhood, we’d all in this room know about it. None of us, I submit, knew what I just told you.

And so this is happening at speed because it’s not just about the Middle East. It is about—I can’t tell you what Syria is going to look like in a year or what, you know, Egypt will look like in three, but I can tell you with 100 percent certainty, by the end of this decade two-thirds of the human race and two-thirds of the Middle East are going to be walking around with smart devices. It’s already bigger than that in the Gulf.

And these are supercomputers. These aren’t just fancy phones. These are folks who are walking around with supercomputers in their pockets. They see the way the rest of the world acts. They want pieces of the other things. They collaborate with each other. They feel empowered because someone who looks like them has done something successfully so that means I can do it as well. And that’s not going back.

And so, to me, the narrative bias is deeply embedded in our society. It’s embedded by the media. It’s embedded by our own instincts of where we spend our time. And it’s something that I think not only we can check, but for us who keep going around in Washington thinking we can take the same hammer over and over again and think every problem in the Middle East is ISIS you can almost predict perfectly how that will play out over time, whereas for the first time we have something here that I keep pushing my friends to think about, which is how should we be thinking about problem solving for a new generation, which is empowered, two-thirds of which are walking around with smart devices? What does that change?

You can argue it changes nothing, if in fact you think about it. And part of the problem is nobody thinks about it. And so that’s what I think is important for all of us to consider.

BOAS: So, speaking of narrative, Elmira, you may think that I didn’t make it past page 2 by asking this, but you start your book with an anecdote about a trip to visit your family in Turkey when you were 8. You were disappointed at what you had here but not there, including ketchup for your fries.

BAYRASLI: There wasn’t ketchup. It was very disappointing. (Laughter.)

BOAS: So when you asked why, your grandmother told you, this isn’t America and it’s so much trouble to start a business in Turkey. Then you wrote, “In America, anything and everything was possible, but not in Turkey.” Fast-forward a few decades and the next 250 pages disprove that, with stories of entrepreneurship and possibility in Turkey and the half-dozen other non-obvious places.

To what extent do you think things are now possible in those unlikely places? And can you tell us if you got your ketchup? (Laughter.)

BAYRASLI: I didn’t, and it was actually the first time that I actually really understood why my parents had immigrated to the United States, you know, this concept that my grandmother had made fries and I wanted ketchup. And, you know, I had been prepared for, you know, the dirt roads and there was no television and the electricity was going off, but when she told me there was no ketchup I, like—I started crying and I was just like, this is the most terrible place in the world.

And the comment about, you know, it’s not—because I said, why can’t someone just start a ketchup factory? I don’t understand. And she said, well, you just can’t do that here. And it was the first time that I actually—it dawned on me that that was one of the reasons that my parents made the difficult decision to immigrate to the United States, because there was opportunity in the United States, that you couldn’t just do that—you couldn’t do that in Turkey.

I think what Chris was touching on now, and why it’s possible now, because now in Turkey, I mean, there’s so—the entrepreneurial ecosystem in Istanbul, Ankara, and throughout the country, it’s really booming and it’s really amazing to see, you know, so many years—I won’t exactly say how many—after—(chuckles)—after that incident.

And I think a couple of things. I think the technology that has spread so far so you have Internet penetration and mobile phones, and I think that the technology has enabled individuals to solve their own problems. And they’re not dependent on whether it’s the government to actually go out there and fix their roads or to communicate with one another. They have access to information. They can figure out the financial component of it. They can move money. The technology has enabled them to do that.

I also think globalization has played a big role in just transforming the economic landscape throughout the world. And I think that, you know, outsourcing has transferred knowledge but it’s also raised incomes. And where you actually see entrepreneurship happening, it doesn’t happen with the poorest of the poor and it doesn’t happen with the richest of the rich. It happens in the middle class. It happens with people who see basic problems, they see gaps in the market, and they have the disposable income, they have the opportunity to actually go in there and solve those problems.

So as you’ve seen fortunes rise in countries like Brazil, India, Russia, and China—where, coincidentally, hand in hand, there have been a lot of entrepreneurs—I think you’re starting to see the barriers that previously have prevented individuals in those places from taking an idea, replicating it, and then scaling it up to really break down those barriers. And my book is very much structured in that way, where I take a look at the obstacles that have prevented individuals outside the United States from replicating the Silicon Valley story—so things like corruption and poor infrastructure and the lack of creative spaces and the lack of competition.

And globalization and technology has just turned that on its head and you have pioneering individuals who understand the challenges in their countries. And the men and women in the book really are—they really understand problem solving. And I actually really had an epiphany in Nigeria about what problems we have.

And as somebody who’s worked in the government, you know, I had automatically assumed that the obstacle in Nigeria which held Nigeria back was poor infrastructure, because you go to Nigeria and in Lagos itself, you know, the electricity goes out, the roads are bad, and the traffic is just terrible and there’s really—public transportation really is nonexistent. You think public transportation—you think poor infrastructure is the challenge.

And when I dug a lot deeper and talked to the entrepreneur that I profile in my book, Tayo Oviosu, who runs a startup called Paga, what I actually understood is that these obstacles such as poor infrastructure are a symptom and not necessarily the root problem, because the problem in Nigeria and why you have poor infrastructure is because they have a lack of a financial framework and the inability to move money has never allowed money to be an asset and to be leveraged and put back into the society where it can then be put into bridges and roads and the electricity system and all of these things.

And so what I’m finding is that, you know, there is no lack of ideas or talent around the world. There is lack of opportunity, but I think as Chris pointed out, in the Middle East I think people are using the technology, you know, tapping into it and they’re eager to solve their own problems.

BOAS: So you talk about technology leveling the playing field. What’s it going to take for folks for whom the playing field has been leveled to leapfrog ahead of the more traditional places like Silicon Valley?

BAYRASLI: You know, one of the reasons I wanted to go to Nigeria and particularly look at the mobile phone space is because you constantly hear this word “leap-frogging” and that how the mobile phone is going to help Africa leapfrog and join, you know, Silicon Valley and everybody else in the 21st century.

I think technology, what’s helping, whether it’s in Nigeria or in Kenya where M-Pesa got started, the original mobile money payment platform, is that it’s helping them catch up. And I think it’s really—it’s a little bit disingenuous to actually talk about leap-frogging. I think it’s enabling those individuals to catch up but doing it in a way where they’re tapping into their own innovations.

Because there’s a challenge of moving money in a lot of places in Africa, what the mobile phone has done is it’s enabled—whether it’s in Kenya or in Nigeria—for those individuals to actually use a medium and a mechanism to move the money around and innovate on that platform, because it’s a challenge that they have. It’s not a challenge that we have here in the United States. We have credit cards, we have bank accounts; we have mechanisms where we already have a financial framework.

I think what’s interesting that technology is enabling individuals to do, whether it’s in Nigeria or Brazil or in other parts of the world, is that it’s enabling them to solve challenges that we don’t actually face here. And what I’m excited about is that we’re seeing just the first generation. You know, this is just like the—I just think it’s the beginning.

SCHROEDER: Absolutely.

BAYRASLI: And I just think it’s so exciting to see how rapidly even the entrepreneurs that I saw five years ago are now really thinking on par with those in Silicon Valley about how do you actually now innovate and take these ideas to scale, and ideas that we certainly would not think of here in the United States. And they’re iterating on them and they’re experimenting with them in a way where I actually think in the next generation, and certainly in the third generation, we’re going to see, really, the next big thing come out, outside of Silicon Valley.

SCHROEDER: Can I add to that?

BOAS: Please.

SCHROEDER: So a lot of times I get asked, particularly in Silicon Valley, what is going to be the next Silicon Valley? And I actually think it’s completely the wrong question. I don’t think it’s actually relevant in the 21st century.

Let me caveat that by saying Silicon Valley is an absolutely extraordinary place, with all the hubris that sometimes gets associated with it. I mean, it’s up there with, you know, Córdoba a thousand years ago. It’s up there with Renaissance Florence. I mean, it is an incredible network effect of talent where unbelievable people want to be around unbelievable people and they get the spiral of it.

Secondly, as a corollary to that, one has to be cautious about thinking about innovation in these other markets and what that means, which I’ll come back to in a second. But, you know, there’s a reason why the Facebook, the Twitter, the Snapchat, the LinkedIn—of almost market where the governments haven’t blocked them is Facebook, Twitter, and Snapchat and LinkedIn. I mean, there is an incredible skill and ability that when these companies scale in software, they tend to dominate powerfully.

By the way, that happens in America too. I mean, Salesforce—I see a lot of enterprise software companies rising and Salesforce still—they have to deal with them. I mean, so these juggernauts, when they get big because of technology, become hard to go up against in America, let alone in these other markets overall.

There’s a wonderful, by the way—on Adreessen Horowitz’s a16z site they did a wonderful podcast on Africa, where a couple of the entrepreneurs pointed out in it—they’re like—you know, one of them tried to do the WeChat or the Whatsapp of Africa. They thought this was a great idea. And of course they got flattened because everyone was using Whatsapp. And they asked, what’s your conclusion of that? And they said, never go up directly against the Americans.

And I think that’s right, but now let’s talk about what innovation means, because we in the West tend to think of innovation as a bright, shiny new thing, and thank god for Elon Musk. I’m all in. I invest in those companies. I love them. It’s awesome. But tell me that someone who could not move a hundred dollars 20 miles without doing it physically four years ago who can now do it with a multiplier effect in terms of their personal safety, in terms of the life they live, in terms of expanding even a small crafts business to reach another market—tell me that’s not innovation.

And I’ll tell you about one of my favorite companies I’ve seen lately, because I’ve been traveling not just in the Middle East but I’ve been expanding it as well. But there’s an amazing company called Twiga in Kenya. Forty-two-thousand fruit vendors are in Nairobi alone, 42,000. Every one of them gets up at 4:00 in the morning to walk two-and-a-half hours to be able to get their inventory of bananas or whatever fruit they’re going to sell, OK? There is no inventory management system. They have amazing instincts about what they need, but if they stock out by noon there’s no getting more supplies anywhere else. It’s just not a great, ideal circumstance.

So, says the couple of founders in the region, what if we could make the distribution system much more effective, use technology to bring containers closer to the city and, where we could, with Tuk Tuks at almost the same cost, deliver the fruit to these vendors? What if, at the same time, you either got for them one of the very cheap—or gave away because now smart devices are $25 a pop and are very, very good—what if you gave them that, gave them a little bit of a data plan by which they could order every day what they want and they could do it, then they could order more than once a day, which means they could grow their business.

What if, with all the data that you get on who’s paying and what they’re doing and how their business is growing, you could then determine how to give them instant micro loans right then, because you have more data about them and their ability to pay than anyone else on earth? That’s a big three. I mean, think about the potential ramifications of that. Now, tell me that’s not innovation? But do I think Amazon is going to do that anytime soon? I really don’t. And I’m wrong all the time, but I don’t.

And so I think that it’s very interesting, as we think about innovation in these markets, on the market’s terms, the understanding of your backyard, the understanding of the dynamics I’ve just described, the understanding of local government regulation, the understanding of cultural sensitivities that big juggernauts on the platforms don’t necessarily understand very well. These things can matter and can scale very large. And the ramifications, I think, in the economy across the boards are deeply profound and are absolutely, in my view, innovative.

BOAS: Can you talk about something that, as you’ve done this work, that had been surprising to you?

BAYRASLI: I think for me what’s been surprising is what Chris touched on about the 5,000 people that we saw in December in Cairo just north of Tahrir Square, you know, 5,000 Arabs coming together to talk about entrepreneurship and ideas and innovation and, you know, to pitch investors and to do—and to do these things.

You know, it’s not so much—I have to say I’m always—I’m not surprised but I’m impressed with the men and women that I do meet around the world and the ideas that they have—and, you know, just from, like, water filtration systems to different ways of, you know, selling retail for different clientele, different alternative energy companies and leveraging the use of technology for alternative energy, you know, delivering services that people have never had like insurance, and the different mechanisms that they’re using.

And I’m always impressed by that, but I think the thing that really surprises me is why we’re not getting it here in the United States, why we’re not getting—what is happening around the world and why we have not adjusted, whether it is our narrative and our world point of view, but also our foreign policy for that matter.

SCHROEDER: Why do you think we’re missing it? Tell them why you think we’re missing it.

BAYRASLI: I think because we still have—you know, we have the institutional mechanisms, whether it’s the media or the way that Washington is structured. And, you know, in the last chapter of my book I look at China, and the obstacle in China is the status quo. And I wrote that very much with the United States in mind, because when you look at companies like Uber and Airbnb, they’re coming up against the establishment.

And that is the biggest barrier for entrepreneurs here in the United States is, you know, we don’t have a lot of challenges here in this country, and so where are you going to actually iterate and innovate? And, you know, yes, thank—you know, thank goodness for the Elon Musks of the world, but, you know, at the end of the day, though, there’s also a limited amount of, you know, thinking about the future and AI and virtual reality.

And the next innovations and where they’re going to be happening is going to be coming outside of the United States, and we’re not thinking about that. We’re not paying attention to what is happening out there. You know, and the one criticism I do have of Silicon Valley is that they’re not—to a certain extent they’re not paying attention to it either. You know, it’s not just Washington. Silicon Valley is not paying attention to it either.

And the men and women that I have met, whether it is in Nigeria or South Africa or Brazil and Mexico—I was just in Malaysia two weeks ago and, you know, looking at—hearing entrepreneurs there, and it’s just—it really, truly is stunning. And I think that we need to be paying attention much more to what’s happening around the world because there are serious problems out there and there are people working on them to solve them.

SCHROEDER: I think in some respects, at least on the Silicon Valley side of it, that—what’s the e-commerce juggernaut that just went public from China a year ago?

BAYRASLI: Alibaba.

SCHROEDER: Alibaba. So I think Alibaba was actually an interesting wakeup call. And it’s been very interesting with friends of mine in Silicon Valley who have looked at it in this lens, which is not just that it’s a big juggernaut, because if you—you know, if you watch the press about Alibaba they say, of course another inside job from Washington—from Beijing; China just made billions of dollars, because that’s what happens there. They pick their winners and winners win, and everything else.

But the story, when you stop to think about it, is here’s a company that came from nowhere, that raised, you know, a lot of money and then now has billions of dollars in revenue, virtually none of which has anything to do with the West at all. And stop and think about what I just said, because for all intents and purposes, over the last 60 years, to make it in the global economy let alone to make it in technology, meant to make it in the West. It actually really meant to make it in America.

So if you even think about hardware in the ’70s and ’80s—so you think about the folks in consumer electronics, in Sony and that kind of stuff—when they talked about becoming global companies, they became global because they made it in America. Software companies still, to this day, if they are successful elsewhere, have to be able to get into our market. Here is a tech-enabled juggernaut of multibillions of dollars which effectively did it without the West at all. That’s the kind of thing that makes people think, maybe we have to look at our narrative a little bit differently, and yet the gravitational pull still is to be so focused here.

As you know, I’ve got a lot of friends in the media business, and I really kicked their ass on this subject. It drives me crazy. The Cairo event I mentioned to you earlier, there were 40 journalists there and maybe three from the West. And one of them took off to go to the Turkish border to cover the disaster there, which is fine. Nothing that I’m saying should say that ISIS is irrelevant or—this is a very tough neighborhood. I’m not saying that narrative is wrong. There’s a lot of tough stuff that we cannot predict for sure in many parts of the world, but I’m saying here’s something else that should be given at least equal time.

And the kinds of things that you hear from the TV journalist friends of mine are like, do you know how hard it is to get foreign anything in the news today? So if we have 30 seconds of a news hole to talk about something in the Middle East and everyone else is talking about ISIS, we’re not going to talk about ISIS? I’m like, you know, but what does that mean? Well, that’s not really—what you’re talking about is not really news, Chris. It’s not news. It’s like these are happy stories. We do happy features from time to time. I’m like, well, you don’t understand.

Go back to the point that I made about the 10,000 young people and the Muslim Brotherhood. That’s a news event because you’re worried that that might have some ramifications on the future of society. The 10,000 young people that we get to see all the time are absolutely changing their society. It may be a different trajectory but it’s a complete different shift.

And so if I leave you with nothing here—because you guys are amazing at what you do, you’re amazing who you know—is to be able to push people to say, we need to be thinking about that in a different way, I think is important because I’m telling you, man, this—in Washington I will sit down at events like—like, I like being a Term Member better. Can I just tell you for the record? (Laughter.) It was a lot of fun here being with you guys and everything else.

Now, when I go to the old people stuff it’s like we’re still talking about the Cold War half the time, right? (Laughter.) And so, like, when we talk about the stuff that we’re talking about now it’s like we need—cybersecurity is a big issue. Yes, it is. We need a START treaty for cybersecurity. It’s like, you clearly don’t understand technology at all—(laughter)—like, at all. Like, this is a network thing. It’s, like, totally different.

And so, you know, I’m just unbelievably enthusiastic to be with you guys because you’re able to understand the foundations of what I’m seeing. Many of you have lived it or seen it, and you have a huge opportunity to constantly be an apostle in conveying how important this is to the world and to this country.

BOAS: So that seems like a perfect opportunity to make the former Western journalist stop asking questions and open the floor to you all. I’m supposed to remind you that this meeting is on the record.

SCHROEDER: Do we still do that? Even as a Term Member we tilt our cards? (Laughter.)

BOAS: You can put yours up too if you’d like.

SCHROEDER: Yeah, I feel very good about that. That’s good.

BOAS: Yeah.

So as a reminder, this is on the record. Also, you probably all know how to use the technology, but to speak, push the button, and then push it again to turn it off. And make sure to state your name and affiliation, and to keep your question to a question.


Q: Thank you. Anish Melwani, LVMH.

I’m curious as to whether you believe—how much of this is really a businesspeople here don’t see this happening versus a media problem? My personal experience is that the media problem you describe is absolutely accurate, but I hear a lot of talk about how to access markets—Middle East, Africa, Southeast Asia—and how companies here are trying to use local entrepreneurs to do it because they know that they can’t do it themselves.

BAYRASLI: I mean, I think that—I think businesspeople are interested. And actually, interestingly, I went to more than two dozen countries to do the research in my book, and I came down to the seven primarily because the publisher said, you know, focus on the markets that Wall Street is interested in, you know, Nigeria, Mexico, India, Russia, China. Those are the markets that the money people here in New York are interested in.

And so certainly there is interest there and people are following those markets, but it’s very much from that still the traditional banking, traditional finance, private equity. They’re seeing there’s a lot of development and there’s certainly construction. Construction is a huge boom in pretty much every emerging market, and so there’s certainly a lot of wealth to be tapped into there.

But when we’re talking about traditional—whether it’s angel investing or venture capital investing, you still see very—those investors from the West are still hesitant to go into those markets. And so I think there’s a handful of the Silicon Valley investors—the Sand Hill Road investors—that have gone out.

I profiled an entrepreneur in my book from Pakistan who managed to get Tim Draper and Tim Draper’s venture capital fund to invest in his firm in Pakistan despite all the bombings that were going on. And it was the year that Benazir Bhutto was assassinated. And he still manages—he managed to convince it. And I go into an extensive look at, well, what is venture capital if it’s not—if it’s not actually risk?

SCHROEDER: Well, the beauty of this world that we’re talking about has a two-edged sword to it, which is it is happening everywhere, which means as a hardnosed businesswoman you have to—you have an opportunity to make decisions which you want to make.

And so you think about the basics like rule of law and those kinds of things, relative stability, and you certainly look at market size. I mean, China and India has been such an early lead in this for all the obvious reasons because it’s a market. But what never ceases to amaze me is how many Americans don’t appreciate that when you talk about, say—let’s use the Arab world as an example of this. There’s 350 million people who speak Arabic in a very sizable market whose per-capita income is larger than India’s, right? And all of a sudden—if you haven’t been to Dubai in the last year, go to Dubai, man.

I mean, it is a different story, what’s happening there, and the government is serious as a heart attack, with ministers, a third or more of whom are women, who are—many of the rest are under the age of 35. And they are on a mission to try to not only bring that city, and then the UAE writ large, but are trying to bring things with them. So a lot of it has to do with getting caught up and seeing the speed of this and see where things are going, I think in very powerful ways.

But it does mean that even businesspeople, to be able to ask these questions, have to say, when I think Middle East I think ISIS and Raqqa. And I keep telling them, you should be thinking about Souq.com in Dubai also. Both are true. Souq.com was just valued by Naspers and by Tiger and some other great investors at over a billion-and-a-half. It’s the largest e-commerce platform in the Arab world right now.

When numbers like that start to come and people know that the whole world has challenges and you have to navigate risk and the challenges that you do, I think people then start to have a different lens and decide to start going. The smart ones know they can only do it in a sense of co-authorship. I mean, the big enterprises understand that if you don’t understand the ground and work with the ground on the ground’s terms, you’re dead in the water.

I think early on, a fair number of the Silicon Valley people who rushed to China—because you have to be there—I mean, they kind of arrived like, I’m Silicon Valley, man; aren’t you lucky to have me here? Man, they got their lunch eaten.



And so there is a phase that comes with this too in the sense of reciprocity where I think, as success breeds success, we won’t be having this conversation in five years, certainly not from the business community. The media I don’t know.

BOAS: Bobbi?

Q: I am Bobbi Thomason from the Wharton School.

So thank you both for your comments. I’m huge fans of your work for not only, I think, shining a light on amazing entrepreneurship that’s happening in emerging markets but for the relationship that you both are creating between the U.S./the West/Silicon Valley and these markets to disrupt what I think we can call the hierarchy, where we associate the sort of serious concept of entrepreneurship, the Steve Jobs figure, in fact only happening in the U.S.

I’m curious for your thoughts on other individuals or organizations in the U.S. and Silicon Valley that are also engaging with entrepreneurs in these markets in a sort of peer “we have something to learn” and disrupting that hierarchy. What are they doing? You know, what else could actors in the U.S. be doing to engage in, I think, a new way that both of you are?

BAYRASLI: Do you want to—

SCHROEDER: Yeah, go ahead.

BAYRASLI: I mean, there’s certainly—there’s certainly organizations both here, Silicon Valley, and in Washington. You know, Chris and I, just last month we were in Medellin, Colombia with the Global Entrepreneurship Network, that started, you know, 10 years ago doing Global Entrepreneurship Week. And, you know, it’s grown into—it’s 80 countries participated in that. Was that right? People from around the world coming together, you know, to have this discussion about what is happening in terms of entrepreneurship around the world.

And there’s certainly no lack of, I think, organizations. Endeavor is one. I used to work at Endeavor, which is a nonprofit that’s headquartered here in New York City that supports what they call high-impact entrepreneurs around the world. I think they just opened up an office in Japan. Good for them.

But I also think that—I think that you’re starting to—it’s one of these things where you have, on both ends—where you have the individuals within these countries doing grassroots, you know, innovative things. But I think what’s so interesting to see is the connections of the individuals who had experience in Silicon Valley going back to seize on the opportunities in their own countries.

And so Tayo Oviosu, who I write about in my book, actually was working at Cisco in Silicon Valley and decided that he was going to go back to Nigeria, where he was born and he grew up, not because at the time Nigeria had become the economic powerhouse it had but he thought, well, if it’s happening in India and China, it’s got to happen in Nigeria sometime soon.

And so you have these individuals—my entrepreneur Bulent Celebi, who I profile in my Turkey chapter, you know, the same story. You know, he was 49 years old. He was the CEO of a tech company in Silicon Valley and he decided, I’m going to go back and I’m going to start a wireless router company in Istanbul. And this was in 2004. This was not when Turkey had, you know, become the economic powerhouse that it had.

And so I think where you’re really starting to see the disruption is not necessarily from organizations but it’s from these pioneering individuals. And I think it really goes hand in hand with what entrepreneurship is, because ultimately it is about disruption and it’s about changing mindsets. So, you know, I do take to task—and I’m glad that you brought up the whole—you know, the concept of innovation.

You know, we associate entrepreneurship with innovation, and that can really be a very tangled—a tangled relationship. Entrepreneurship doesn’t necessarily have to be a shiny new product. It’s actually just going out there and doing something in a new way. And I actually define entrepreneurship as remaking the socioeconomic landscape.

And that is what has been missing around the world. And now you’ve having individuals who are taking that risk and going back to the countries where, you know, their parents hailed from, where they originally were from, and they’re doing it because they see that the world has changed and there is an opportunity to do it. And they’re pioneering it in a way where a lot of people are getting on board with it.

SCHROEDER: How many of you have seen “Narcos,” by the way? Any of you watch “Narcos”? It’s awesome, isn’t it? Hey, I urge it completely. But stop and think what she said almost parenthetically, right? We’re in a gathering of thousands of young people, many of whom were from Medellin, which was, 20 years ago, a complete war zone of historic proportions. Hundreds of thousands of people died in that conflict, which people forget about now today. And here it is one of the fastest-growing economies in the—in Latin America. It is a jewel of the region. It’s absolutely beautiful country.

Medellin was an incredibly vibrant city and there were these great entrepreneurs doing things. The reason why that’s important is because when people go around and say, like, you know, these places that are disasters, they need America, they need to be engaged, and maybe they’ll never come back, and don’t bother with Iraq or the refugee crisis because it could never happen, well, you know, look at Colombia.

And I am involved with an organization called Gaza Sky Geeks, which is—it’s a mind-blow incubator of hundreds of entrepreneurs in Gaza right now solving local problems, trying to solve problems beyond Gaza, but unfortunately, because of the way technology is connected, it’s a little bit hard for them to do. But these entrepreneurs are rock stars, man. They’re just awesome and tenacious and fearless and what have you.

To your question, Gaza Sky Geeks got funded in part by Mercy Corps. So there are a lot of different groups who are thinking creatively about how to be able to fund and co-author, but there is no substitute for people who actually get on a plane and go to the places and engage on their terms. Dave McClure, God bless him, of 500 startups, shows up, man, I mean to great personal sacrifice. This guy is in a different country all the time, showing up, building relationships with people on the ground and co-authoring, not top-down.

But I think the most important point is I think the diaspora population can be a huge bridge the way that Elmira talked about so beautifully before. I do think people are not only going back there, but people who remain here, that’s an amazing connection. We’ve seen it happen beautifully, particularly with India. We’ve seen it happen beautifully with Israel. All that’s important but it’s happening anyway. No one is waiting around for America to engage other than they would love to be able to do business development stuff, co-author in learning, find ways to work together and everything else.

Eight years ago—five years ago—eight years ago these sort of classic stories was the kind of story that she talked about, where if you were a Chinese American who went back to China, that was a perfect bridge to be able to invest into. It is stunning to me now how many venture capital operations and entrepreneurs themselves are Chinese first. They’re not, anymore, as much of that story. And you’re just going to see more and more of that everywhere, which just means, one, the opportunity is enormous but it is a co-authored opportunity. It is one where everyone brings something to the table. No one is sitting around waiting for us.

But on the other hand—I’ll give you an example. They love us for this. That’s the other side of the coin. So there’s one of the largest shared workspaces I write a little bit about in the book. One of the largest shared workspaces in the Arab world is in the old American University of Cairo in downtown, right by Tahrir Square. You could throw a baseball at Tahrir Square from where it’s located. And it’s just a really beautiful renovated space they’ve done. Thousands of young people are there on a regular basis. They give office space to businesses and that kind of thing. It’s very vibrant. It’s where this big gathering we went to was hosted.

Anyway, about a year ago there was a smaller gathering. There was, like, maybe a thousand people, you know, milling about and everything else. And as I arrived there, I came in, and in the background I could see these huge photographs of men. And I thought, oh, Sisi co-opted this one. I mean, I figured these are big political figures and the time has come. And I get closer and closer, and it’s Jack Dorsey and Mark Zuckerberg and Elon Musk, and that’s what they put up there.

So there’s a lot of strength in an understanding of the power of co-authorship, but nor is there anyone waiting around hoping that we’ll figure this out.

BOAS: Daniel?

Q: Hi. Dan O’Keefe from Technology Crossover Ventures. We are an admittedly Silicon Valley-based, later-stage technology investment firm, but we invest on a global basis.

And as I was thinking about the conversation—we talked quite a bit about how a mobile device and the fabric of information enables entrepreneurship, but it does occur to me that there’s a flip side to the coin, which is what—how you enable and attract institutional capital, right, at scale, which obviously the U.S. has done quite effectively and certain regions have done quite effectively.

And some of what I would argue will attract institutional capital at scale are institutions controlled by state actors, right, so things like established contract law, bankruptcy protection or some form of downside protection that enables risk taking. And I’m just curious if you’ve seen examples where this groundswell of entrepreneurship activity—you know, this kind of bottoms-up activity, has created any institutions to adapt to a more entrepreneurial level of activity.

We’ve seen that in the political side of things, right, where institutions are challenged by the information flow that a mobile device enables. I’m just curious if you’ve seen that happen in entrepreneurship.

BAYRASLI: Why don’t you take that one?

SCHROEDER: So a couple things.

It is a bottom-up—there’s a wonderful quote in my book. For those of you who speak Arabic, or particularly Lebanese Arabic, there’s this wonderful word called “wasta.” And wasta is effectively, like, who do you know? That’s effectively what it means. And it’s a pejorative statement. It’s like, if you don’t know somebody, you can’t get anything done, and everything else like that.

Now, coming from Washington I know wasta very well, but it is a different—I mean, because it’s a cancer, right? I mean, if you’re in a big organization and you’re a young, ambitious person, and somebody’s on top of you and you’ll never get over that person because wasta has protected him—it actually goes deep in the system and everything else.

Anyways, to your question, one of my favorite quotes—two—I have two favorite quotes in the book, and one of them comes from Fadi Ghandour who said, you know, there is no wasta on the Internet. And what he means by that is twofold. One is you’re able to move so quickly and do things so quickly that by the time you’re there, the rest of the system has to figure out how to engage with you. And they can make a decision to squash you or try to corrupt you or anything else, but more often than not they realize they’re in a process where they’ve got to think about things.

And so if you look, for example, at the role of Uber and Careem, which is the Uber competitor—a spectacular company in the region—like, when people come out in the streets and protest the defense of Uber over the lousy taxi service, governments have to take notice. And Uber and Careem could only grow to the way that they’ve grown because of their ability to effectively end-run it, you know, very quickly.

A second example of that is when I—when I was covering, as it were, the Arab world there was something like 7.5 million people on LinkedIn in the Arab world, and LinkedIn had no presence in the Arab world. LinkedIn is the ultimate go-around of wasta because it’s not who do you know on—it is a little bit to the degree that you care about whose friend is whose friend, but it’s your track record. It is who you are in that kind of a thing.

So at one level you see what you talked about, which I think is exactly right, which is this unleashing of the bottom-up. The top-down matters. What’s going on obviously in places like Syria and Iraq are very different than what’s going on in Dubai—and which, by the way, as a total aside and for a longer conversation, may very well be happening in Saudi Arabia now. There are some very interesting developments there that could be fascinating to watch. If it comes to fruition, we don’t know.

But what has happened is governments—like UAE is a perfect example of this. Certainly Singapore is another example of this. They get the joke. They look at their countries. They look at the future. They think about the ramification and they understand that fundamentally—perhaps not perfectly by our standards, though our rule of law standards are certainly mixed on this—if you’re on the side of the free movement of people, ideas, goods and services, and capital, this will have a multiplier effect. So, as an investor, you need to be looking at what are those hubs and centers that do stuff, still knowing that even the more complicated places are better than the ones that we love.

I have to tell you, Egypt’s got lots of challenges and their law system is hardly, you know, obvious to me, but if you told me I thought I’d have a better shot of getting restitution in a Cairo court versus a court in China, I don’t know. I mean, these are all—these are not for the soft of heart. You go into these things with a risk tolerance that has to be able to navigate these things, keeping that in mind.

I think one of the biggest opportunities for someone of your size—not that you would necessarily do it, but it would be helpful to the flywheel of the ecosystem—is growth capital across growth markets. There is more angel investing than ever before. There is a fair amount of A money that’s—before. I could name you now almost six or seven A-round funds in the Arab world alone that are 50 (million dollars) to 100 million (dollars). You know, Fadi runs an outstanding fund, which is, you know, doing very, very successfully in that.

But what often happens is these young people will build a business to a certain point, but there is no money between them and you to be able to get them to a point where you would become interesting. And I’m now pushing on this theme. And I myself may even participate in this, but I think that will actually be almost as big as a criteria for you, because at the end of the day, countries will either come along or they won’t.

And personally, I believe the ones that won’t, will fall behind where technology is moving so quickly they may not be able to catch up. But your ability to figure out who those are in some of these markets is actually becoming only more clear, not less so. We can always be surprised, but it’s becoming more clear than less so.

BAYRASLI: I look at the case of Mexico. And actually, I talk about how Mexico probably is the winner, in my book, of the seven countries, and I think precisely because you do have this groundswell of individuals starting businesses, even the areas—what was interesting about being in Mexico—I was there in 2013, and in 2013 there were still very few e-commerce companies. I was seeing a lot of energy companies. I was certainly seeing a lot of B2B companies.

And when I asked around, particularly the investors, I said, where are the e-commerce companies? They all said, why would we—why would we try to compete with the Americans? Like, we’re never going to beat Amazon. We have to fill the gaps and touch on the areas where the Americans are weak. And, you know, here is where the—you know, the competitive advantage for Mexico is.

What I thought was so interesting in Mexico, and why I think it comes out as a winner, is because you have these individuals who are rushing into these areas where they see an opportunity and the government is responding, and so the Mexican government has done a really terrific job in reforming their macroeconomic policies. They have developed funds very much like replicating what the Israelis did with the Yozma fund, and matching—making sure that they guarantee Mexican investors, that those funds are guaranteed and they’re encouraging Mexicans to invest in Mexican entrepreneurs.

And what the result has been is it’s actually transforming the economic landscape in Mexico. It was two years ago where the government broke up the energy monopolies and they also broke up the telecom monopolies. I mean, they broke up what Carlos Slim had. And for the most part that has happened, you know, without much violence, because I think that those individuals, particularly Carlos Slim, see what is coming. They see that entrepreneurship is not something that’s just happening in their country but they see it’s happening around the world. And if they want to continue to compete and be as competitive, they actually have to support one another as an ecosystem.

And so I actually was starting to see that all the components of whether it’s the government policies, the entrepreneurs, the educational institutions with the investors all really coming together and synchronizing and working together because they understand that it’s a game that they all have to be in to win.

BOAS: Reka (sp)?

Q: So thank you, both of you.

BOAS: Put your mic on.

Q: (Off mic.)

BOAS: Mic.

Q: (Comes on mic.) So the question I have for you is—

SCHROEDER: Could you repeat that part about—

(Cross talk, laughter.)

Q: I was very excited about it.

So I am curious about impact funding in the U.S. There’s this huge desire and market—you know, Bain recently announced several months ago they’re creating an impact fund, so there’s potentially this massive marketplace that—and a desire. And what I have seen from the corporate responsibility side is this lack of origination. And so there’s this big gap.

Obviously there’s a lot going on. You have to hit the ground. You have to be on the ground to understand what’s going on. But I think the thing that’s most surprising to a lot of the people on the CSR side, who kind of think about this as something they want to get into, there may be perhaps a desire to even accept a, you know, less than 2-in-20 term sheet, which seems to still be the common term sheet when you’re talking about impact investing, surprisingly.

What needs to happen, do you think, to fill that gap in terms of origination to get enough deals in the pipeline that you can really start to see some of these organizations go to scale?

BAYRASLI: Oh, you’re the money guy. I’m going to let you answer that. (Laughter.)

SCHROEDER: I’m not a money guy.

I think there are plenty of companies and there are plenty of opportunities. And it really depends on where you’re focused and what you want to do and, you know, what strings attached you’re wanting to do. I mean, to me the idea that this is a denominator issue is not the issue. Finding the good ones that are fundable becomes a challenge all of us who do investment in this room have to wrestle overall. I don’t think your challenge is unique in that.

But I think very often what happens is that—but I think CSR is important, but a lot of times I think people, they hide behind it as almost a PR kind of a thing, and so they’re not necessarily looking for the right criteria in terms of what they’re doing. They’re trying to check a box of what they’re looking to do. And I think at the end of the day, the criteria of what is a great enterprise and what is the impact that it can make, and how big can it be, and does it justify the terms is the focus of it all. And they’re out there, so I don’t think they’re not out there.

Q: Well, and just as a follow up, I think, you know, one of the challenges—you know, so let’s just say I’m working for one of the good guys who really wants to find that good social impact and is willing to take, you know, a lower profit margin or a longer timeframe to receive any profit or return for their foundation.

You know, I think the challenge is that we’re seeing a lot of organizations out there who maybe—you know, those in the room, you know, not—those not included, but that we’re seeing a lot of companies who are, you know, capital investors or VCs who kind of think, OK, well, we’re going to do a social impact when it’s another product, it’s another opportunity, but the term sheets aren’t all that different and they’re having trouble getting the money out the door.

SCHROEDER: So look, this is a personal bias—

Q: Yeah.

SCHROEDER: —and so discount it substantially, as you should discount anything that comes out of my mouth. But, you know, “social impact” is a term that as a—I don’t quite understand what it means or what it is as a class, right—


SCHROEDER: —because I really think, at the end of the day, that Facebook, which has obviously done quite well for its investors, has had more impact on humanity than almost anything I’ve seen in my life, certainly any of the top-down aid programs that I witness in Washington. I mean, it’s the ability to all of a sudden have people who did not have access to each other to have access to each other. It has been deeply profound.

By the way, as an aside, the proceeds of my book I’m giving away to something called Ruwwad, which is a social enterprise that was started by Fadi Ghandour in Jordan and now it’s in Budrus and Tripoli, Lebanon, and it’s in multiple places. These are community centers built of and for the community and doing very, very powerful things, effectively teaching folks civil dialogue, civil society, and allowing them to think about opportunities where they could get jobs or work for companies or think about entrepreneurship. They also give scholarships so that these young people get to go out—OK.

So one of the very, very poor areas of Amman, Jordan, one of the refugee camps there, you know, you go around and you start to interview the young people in the program and every one of them has a smart device that their family pooled enough money to be able to get it for them. And every one of them has—says, when you say, what are you doing with this, they say, well, we’re using “Face.” What do you mean? We’re using Facebook. We’re using “What.” That’s WhatsApp. What are you doing with it?

And it becomes clear they do all the stuff we all do with social networks, but all of a sudden a life and an existence that was fundamentally one square mile—which, by the way, as you know, any of you who have worked with city communities here, often people just—their entire world outlook is one mile. All of a sudden their outlook becomes the world. I mean, that’s huge.

And so I just think that we—I don’t use social—I mean, there are things that—I hate this term, so forgive me for using it, but it’s the least descriptive—there are activities happening at the bottom of the pyramid that will not yield 30 percent returns in that classic sense. I get that, but I still think they can yield returns and I think some of them at scale will yield many big returns. So I understand that. There are complicating matters that don’t make the classic for-profit model yield with the same ease. But I’ve got to tell you, I’m just uncomfortable with the term.

I think that anytime there’s a young person who’s ambitious and excited about what they’re doing and they see it having a multiplier impact in their community, and then in their city, and then in their country, then in their region, and a lot of these young people are even thinking globally, we should be bringing to the fore the same mindset with them and not necessarily put them in a different category.

BOAS: We have just a couple minutes left but we have three people who have been waiting very patiently. So if you wouldn’t mind, maybe we’ll do Leah and then Zeeshan. And then, Julie (sp), do you still have your question? OK, then we have only two very patient people. So maybe let’s hear both questions and then you can maybe answer them together.

Q: OK, Leah Pedersen Thomas, VitalPet.

Unintentionally so, my question is a bit of a tack-on to what Reka (ph) said, so it will probably be shortened by virtue of that. But essentially you had mentioned, Elmira, that the West isn’t really taking seriously or getting this concept of these entrepreneurs. And then obviously, Chris, you raised the example—the great example of Nigeria and technology platform to help vendors improve procurement.

And so with that, is the evolving narrative of social impact investing, social entrepreneurship, as well as labeling these genuine entrepreneurs who are trying to create jobs as well as fix systemic problems and have an ROI—is it the labeling of them that’s actually diminishing this attention? And are we doing harm to them more so by labeling or couching them as social impact and social entrepreneurs?

BAYRASLI: I mean, I don’t think that we’re doing any damage. I mean, those labels, I don’t see them in the places I travel to. I mean, I think where I hear the word “social entrepreneur” or “social impact fund,” I hear here in the United States. I virtually don’t—I don’t hear it in any of the countries I’ve traveled to. And if I have heard it, it’s because there’s a Western NGO or someone from the West who has that intention of coming in and trying to create either a social enterprise and support it in that way.

In terms—yes?

Q: Oh, no, I’m sorry to interrupt. Just for a clarification, I meant it within the context of the Western world and our putting the label, recognizing that the label probably doesn’t exist locally, but is our label—enforcement of that label, is it somehow harming but—

SCHROEDER: Sounds like you agree.

BAYRASLI: Yeah. I mean, I do—I do actually think, because I think we’re still looking—you know, I started out and I started saying how, you know, when we say the word “entrepreneur” in the context of Africa, Asia, Latin America, and the Middle East, we think about it as, you know, like something—microfinance. We think about, you know, handicrafts and we’re thinking about something micro. But the reality is, inasmuch as there are those enterprises going on around the world, there are numerous and, I think, far greater number of enterprises that are really scalable and that can have the return on it.

And so I think, you know, again, it’s about the mindset that we’re having and how we’re looking at entrepreneurship outside the world. And I think what Chris and I—I think what we try to do with our books is really try to change that mindset and the thinking about how we’re approaching and seeing the greater world. And we need to do it because it’s happening and they’re not waiting for us, and they’re creating the enterprises, and the train has left the station.

And we’re still talking about, you know, development and we’re talking about social impact, and the world is a different place. You know, the United States is not the savior anymore. Countries are out there and they’re solving their own problems and they’re doing it with or without our capital and our assistance.

SCHROEDER: I must say, the region that I’ve spent a lot of time with lately, I don’t think they think our savior batting average is that great to begin with. (Laughter.)

BOAS: Zeeshan?

Q: Zeeshan Zaidi with Live Nation Entertainment, although previously I was at several startups in the New York area.

How do you think about or quantify the impact that this entrepreneurial revolution in these emerging economies or developing economies is having on economic development, right, or traditional metrics that you think about when you think about economic development, like per capita income or employment?

Is it just that some jobs are created and some fortunes are made? Or is it something broader like, you know, the quality of life of a lot of people is improved or problems are solved? But is it—you know, is it moving the needle in terms of the metrics that, for example, the World Bank would look at? Or are those metrics just not as relevant anymore?

SCHROEDER: Some metrics are not relevant and never were. Some metrics are certainly provocative and all conversations of data should be addressable overall.

We are in a revolution in process, and one of the things—because I did—other people did most of the work but I did a paper—I vowed I’d never do anything with a think tank but the Atlantic Council put together an amazing bipartisan group with Madeleine Albright and Steve Hadley and then really wanted to look at the lens of the Middle East differently. And so we pulled together a bunch of these rock stars from the Middle East and put together a thought paper, you know, about this kind of a question and about thinking about the metrics.

And one of the points that we made—and I believe very well, because in the early days of it I really got slammed by macro economists who were effectively saying this stuff doesn’t matter. And I’m like, let me be very clear to you—because I’ve actually researched this; I’m not making this up off the top of my head—if you see what macroeconomists said about the automobile in 1910 and its ramifications on the economy; if you asked them about what television meant to 1938, macro to the economy; if you asked them to talk about air conditioning in 1950, the Internet in 1992, mobile in 2001, and think about what they’re saying today about robotics and AI and genomics and that kind of stuff—we’re dealing with something that is in process. Some of it is anecdotal, some of it is better than anecdotal but these are still relatively early days.

The question is, what percentage of the economy do we think is going to be focused in innovation or technology versus where it is today, because I’ll make the step further—and I think this is important. I wish I had underscored it before. I think the startups and the entrepreneurship and the breadth that is being unleashed around the world because of technology is profound. And we know that most jobs are created by the smaller end of the sector to begin with anyways.

But every company on earth now is a technology—is a software company in some form. Every one. You know, go to Starbucks and order a cup of coffee. Go look under the hood of your car. Everything now is a technology company, and even more so. And the ones that don’t understand that are going to fall back. So all the factors that she’s described so beautifully around the world and some of the stuff that I’ve talked about there is actually the similar factors that will have all aspects of the economy overall. And so I don’t think it’s a matter of whether; it’s a matter of when, and we have to engage it in those terms.

BAYRASLI: I mean, what I’ve seen is I think they are not only creating the jobs but, you know, going back to how I define entrepreneurship, I think they’re remaking the socioeconomic landscape. And I’ve seen that wherever I have traveled, and the governments realize that. And the governments are responding by creating the funds and changing their policies and really focusing in on the entrepreneurship.

China, the government of China—I mean, entrepreneurship is one of the top priorities for the Communist Party, ironically, because inasmuch as China’s fortunes have, you know, gone in a really positive direction and, you know, it’s the second-largest economy in the world, you still have 500 million people in that country who live below the poverty line. And the Chinese government needs to figure out, how do we actually bring those people into the fold? How do we actually get them to be on par with the rest of the country? How do we create those jobs? And they certainly believe it’s through—it’s through entrepreneurs.

SCHROEDER: Most of these countries, particularly in the Middle East but across the world now, have 30 (percent), 40 (percent), 50 percent of their population is under 35. Thirty percent unemployment there, we have a big problem; 50 percent unemployment in some cases.

So the governments that are smart are getting it. When the government of UAE says three months ago, we will celebrate the last barrel of oil, that’s a hell of a—and focus on innovation and technology and entrepreneurship, that’s a hell of a statement. And China is a good example. India is another good example. So I think that the ones who get it will have great ramifications. The ones who doubt it may truly fall behind for good.

BOAS: Well, look, we could do this for another several hours—

SCHROEDER: Thank you.

BOAS: —but I want to be respectful of everybody’s time. Thank you so much to you both for doing this, and thank you all.

BAYRASLI: Thank you. (Applause.)


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