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Computer Engineer Builds Micro-Economies through Resource Matching

Jeff Smith, Founder and CTO, SensorLogic

By his early 40's, Jeff Smith had worked on wireless sensor and control systems for Motorola, The Robotics Institute and the SuperCollider. He had cofounded an ISP later acquired by a company that became one of the largest Web-hosting companies in the world. In 2002, he founded Dallas-based SensorLogic, Inc., which develops remote monitoring and control systems worldwide. And, along the way, he started the Cypress Institute, holding strategic planning retreats for small companies. Rather than monetary compensation, he asked clients, when capable, to donate time and money to help other entrepreneurs.

The Cypress Institute's evolution into EntreCorps.org—an Internet-based initiative to leverage successful entrepreneurs' mental and material assets on behalf of poor communities—began about three years ago. Today, EntreCorps holds promise to lift such communities out of poverty through entrepreneurship.

Smith received the Kauffman Community Award in honor of his accomplishments at a special presentation on August 17, 2006, at the EO Chicago University. The award, created in 2002 to further the values fostered by Mr. Kauffman and perpetuated by the Kauffman Foundation, recognizes that entrepreneurs make a broader and invaluable contribution to their communities—beyond the confines of the business world—as engaged citizens.

Empowerment through Entrepreneurship

When giving to combat poverty through entrepreneurship, the most typical vehicles and targets are money for schools and scholarships, mentoring for students and startups, and volunteering for boards and committees. All important and good. But, after a church mission trip to Magote, a mountain village above Honduras' capital city of Tegucigalpa, Smith envisioned a different path.

First, he observed, while missions surely make a difference in people's lives, long-term impact is less certain. Second, what people in extreme poverty need most isn't necessarily cash. In fact, given their lack of education, cash might be the least helpful thing one could give them. Third, he realized that he and untold others had "stuff" rotting in garages and warehouses that could change people's lives.

"Actually," says Smith, "it hit me when I was working on a house with Fredy. Fredy has a fourth grade education and supports six members of his family. He came to work one day carrying a ratty black satchel. Inside, he had a broken multi-meter, a bag of plastic electronic parts and a dog-eared 1983 integrated circuit master catalog that he was using to repair parts of machinery he ripped out of dumpsters."

What impressed Smith most about Fredy was his passion for electronics and aptitude to learn.

Smith made several more trips from his home in Addison, Texas, to Honduras to help Fredy build his electronics repair shop, bringing him with spare parts obtained through contacts with a Fort Worth repairmen's guild. Problem was that Fredy's neighbors, aware that Fredy was getting free parts, expected free service.

"We had to basically give him a mentorship from an entrepreneur's standpoint," says Smith. "We had to teach Fredy what running a business is really about."

Mentoring and Monitoring

Smith shared these experiences with friends. Many were intrigued and asked how they could get involved. Bob Duncan, CEO of American Leather, provided more than 2,000 pounds of scrap leather that Magote residents are now turning into Bible covers, daytimers and purses. Stephen Jones, president of the Dallas Cowboys, donates hundreds of clothing seconds for the community thrift store. Guillermo Perales, president of CG Management, provides kitchen equipment for a training facility and restaurant. Chiquita makes empty containers available for shipping.

Some 1,900 people who survived Hurricane Mitch in 1998, 70 percent of them unemployed, live in Magote on $1 a day. What Smith saw coming to life there, thanks to these depreciated assets and scrap materials, was a micro-economy Like family farms of a different era, he saw how small businesses could not only sustain large families but be passed from one generation to the next.

"It's amazing to see the tremendous impact that something like a water filtration machine can have on a community," he says. "Someone donates a water filter. Water filtration guy supplies water to battery charger guy, which produces light for the woman selling shirts in the bodega, who calls Fredy when she needs her TV repaired."

Smith also understands that materials and equipment alone aren't enough to start small businesses in disadvantaged environments, much less keep them running. Entrepreneurs like Fredy also need mentoring and monitoring. But how to do that in a place like Magote—or any remote location?

Shelley Jones, co-director of Hope for Honduras, which serves as Smith's base of operations in Honduras, explains how he did it there: "Because he's a computer genius, Jeff figured out how to put up an antennae that enables us to access high-speed Internet."

Entrecorps.org—the nonprofit entity Smith has created to continue and replicate what's happening in Magote—provides a model for matching intellectual and material resources with aspiring entrepreneurs wherever they happen to be, whenever they need the help. Entrecorps.org uses free universal collaboration (free international voice calling) and remote video to enable entrepreneurs like himself to connect with entrepreneurs like Fredy.

It Can Work Anywhere

"This isn't just giving money or developing job skills where no jobs are to be had," says Smith's friend Duncan. "What Jeff's doing is creating businesses that help people become self-sufficient and engaging entrepreneurs to give in a way that's much more satisfying than asking your buddies to write a check."

Duncan believes any capitalistic society would be supportive of this approach. In fact, he says, "It might even work better in the United States because of our culture and higher market demand."

Smith has no doubts.

"We underestimate the capability of people born into despair," he says. "In many cases, they're as smart and passionate as anyone but just don't have the resources to overcome poverty. When you look at it, Magote barely has electricity. It's a worst-case scenario. If EntreCorps works in Magote, it can work anywhere."

© 2006 Ewing Marion Kauffman Foundation. All rights reserved.

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