On October 2, 2014, after 16 consecutive months in the country, I left Brazil with no plans to return. In retrospect, I’m sure I’d have imagined such an early departure as an unacceptable failure if asked in June 2013, when I flew to Rio on a one-way ticket to run Favela Experience.
Back then, I was zealous about proving all the doubters wrong. How exactly those aware of my unconventional business doubted me didn’t really concern me. In reality, many friends, faculty, and acquaintances expressed their confidence in my personal success, in spite of their uncertainty about my business. Nonetheless, I internalized a battle narrative of me versus the world. I was the guy who was going to show everyone that “slum tourism” could not only be ethical and beneficial, but that it could make millions of dollars. I was going to exemplify on a large scale that travel can be a force for good. Regardless of my lofty vision, every academic who accused me of exploitation, every well-to-do Brazilian who gasped in fear, and every investor who shuddered at the concept only further isolated me in my one-man crusade.
By the end of 2013, witnessing my meager savings dwindle to “Oh, shit!” levels, I reached peak loneliness and capitulation. I’d spend days on end by myself in my apartment lying in front of my laptop while a dusty fan blew hot, balmy air into my face from a foot away. It was then I resolved to just get through the June-July FIFA World Cup in order to fulfill our business obligations and leave Brazil.
Besides that, I became pessimistic about fulfilling my aspirations in Brazil as I researched the incorporation, tax, and immigration challenges for a foreign entrepreneur. I quickly came to admire the gringos who manage to grow businesses against the current of inefficiency and corruption in the country. For me, it was already hard enough to make sufficient money to feed myself.
Suddenly and partly by virtue of being in the right place at the right time, Favela Experience began to show promise. We launched a moderately profitable crowdfunding campaign pre-selling World Cup accommodation, we were featured in The New York Times (commencing a media onslaught that lasted through the tournament), I hired our first Rio-based interns, and the busy summer season began.
Nonetheless, I couldn’t fully revel in the sales and recognition because the high volume of guests affected me in an unpredictable way. Until then I’d convinced myself it was better to stay in one place for a long time to understand the culture and build meaningful relationships with locals. However, experiencing the transient nature of my guests, who were often on South-America-wide or even round-the-world journeys, made me jealous. My customers were awaking every day to the wonder of something new while I was stuck in one spot, facing the frustrations of being a solo, immigrant founder in a developing country.
Even though Favela Experience performed well during the World Cup, the frenetic, global atmosphere of the tournament just solidified my wanderlust. With each new customer’s travel tale from an unexplored part of the world, my dream itinerary grew by a leg. After nearly three years of working and studying in Latin America, I was comfortable enough with the region that I wanted to travel somewhere completely different. Thanks to the World Cup rush and my frugal lifestyle, I’d probably saved more money than my classmates doing banking in New York, so I was ready to take my dream trip.
Continuing Favela Experience
But I had one last moral and logistical quandary. I couldn’t simply abandon what we’d built in Brazil. Of course, I desired to give continuity to something into which I poured my soul, something that subsumed my identity. I’d feel riddled with guilt if I were to have simply closed the business and left.
There were a few options, but I wasn’t very hopeful about any of them. All the possibilities I saw were constrained by perhaps my greatest failure–creating a small business dependent on me instead of a modular, standardized system that any qualified team could run. It was I who possessed all the trust-centered relationships, understood the cultural nuances of business in the favela, and developed the intuition to handle every problem. And it was I who also failed to document our business’ processes, which would allow me to best transition the business to other people.
At first, I toyed with the idea of hosts independently managing the entire hospitality experience at their respective properties all under the umbrella of the Favela Experience brand. The flaw in that plan was that we’d struggle to teach our hosts that which was the core value we already offered them. How could we train favela residents to have a foreign traveler’s perspective, business acumen, and an understanding of online marketing, let alone do so in a few months?
Of course, some people have asked me why didn’t I sell the business. Maybe I underestimated what we’d built, but it seemed obvious that Favela Experience was too small and its value too intangible to be bought. Morever, there’s a long history of for-purpose ventures being sold to companies with no regard for their social impact.
Unexpectedly, a solution emerged after explaining my predicament to my friend Adam Newman, a fellow American entrepreneur in Rio. Without telling me, he began hatching a proposal to take over Favela Experience. A few days before the World Cup opening ceremony, over a meal at my favorite favela restaurant, he presented his vision, and we agreed to make it happen.
Initially I was uneasy introducing Adam to hosts as a new partner in the business while withholding my plan to leave. My logic was that I wanted to wait until the hosts were comfortable with Adam before making my announcement. After all, I deeply cared for our hosts as they were truly more than business partners. By spending so much time inside their homes, I felt I was a part of their families, having come to appreciate their wide-ranging eccentricities. Fortunately my goodbyes didn’t become teary pleas for me to stay as I’d imagined, but the discussions were still difficult. One family even guided us together in Christian prayer with our eyes closed and hands interlocked. Nonetheless, I was unsettled by their genuine expectation that I’d return to Brazil soon, given my uncertain career path.
Many meetings between us and hosts later, Adam and his partners Rodrigo Viera from Uruguay and Facundo Esain from Argentina assumed full control of Favela Experience. I simply gave them the business for free, meaning I no longer have any decision-making authority or ownership. To abate my nostalgia for Brazil, I’ll continue as an advisor to Adam, but I’m not involved in daily operations because I want to be able to fully focus on future endeavors.
I’m confident favela tourism has a brighter future than ever with this new team, and I’m excited for what they’ll accomplish especially with the upcoming 2016 Summer Olympics.
The Favela MBA
From such a formative experience my greatest lessons are far more about myself and far less about business.
First and foremost, I erred in starting a business alone. Despite some great interns along with supporters in Rio and at home, there was never anyone as emotionally or financially invested in the business as I was. There wasn’t anyone with whom I could share the victories and commiserate about the headaches. Being a lone founder is an experience of intense solitude, and I’m not, nor do I think I need to be, equipped to do it again. Complimentary skillsets are beneficial, but if you have no one to motivate you and hold you accountable, then it’s hard to even employ your own limited skillset.
In addition, I realized I’m not fit in a role revolving around customer service. Those most effective at making angry customers happy don’t make excuses. Instead, they assume blame regardless of whose fault it is in order to swiftly reach a solution. I did this a lot in order to satisfy guests and hosts, and it was draining. I know customer service is mandatory for founders when starting, but in my next venture I’ll have to quickly transition out of that responsibility. Clearly my aversion to customer service mostly precludes me working in the hospitality industry again.
Most importantly, despite the mixed outcome of my first attempt at social entrepreneurship, I’m hooked. I view for-purpose businesses, particularly those targeting poverty and climate change, as the single greatest contributor to a better world in this century. This is what I’m dedicating myself to, and I believe I’m the right person to start and run these businesses.