Death of a startup: Afghan ringtones?

Keen to tap a fast-growing market, I underestimated the cultural obstacles to running my telecom startup.

Eaton Dunkelberger, FSB contributor

Palo Alto (FSB Magazine) -- When I finished my MBA last year with $20,000 in unused school loans, I realized I could tap that money to start my own business. With a degree from the London Business School, I figured I could take my entrepreneurial talents anywhere in the world.

I chose Afghanistan.

It was even more of a challenge than I expected. The main difficulty wasn't so much the security situation. More problematic was the fact that years of war and chaos have made Afghan businesspeople cautious about offending the mullahs and the government. I planned to sell ringtones and other mobile-phone content. To do that I had to get my customers - the country's mobile-phone providers - to take a chance on services that the culture had yet to accept. Along the way I got quite an education.

My interest in the Middle East began in 2003, when I served a six-month tour of duty as a U.S. Marine Corps officer during the invasion of Iraq. In the aftermath I saw that development of the region's private sector was almost nonexistent. I wanted to get involved.

I visited Afghanistan for the first time in 2005, when I interned at a new staffing agency during my summer break from business school. Back in London, I searched for a business in which I could draw on what I had learned about Afghan business culture. A friend suggested mobile-phone content. "Man, people would go bananas for this," he said. I thought he was right. The country was just discovering cellphones. I put together a business plan.

I returned to Afghanistan in April 2006 to set up Danebarf, which means "snowflake" in Dari, one of the languages spoken there. At the time there were about a million mobile-phone users in the country, and the number was growing fast.

After grueling efforts to meet with the right contacts at the country's three large mobile-phone companies, I persuaded them to let me sell ringtones to their customers. But my main goal was to deliver products with higher margins. I proposed a text-messaged horoscope service. The executives rejected the idea. They feared that we might offend religious leaders who consider horoscopes offensive to God. They also nixed my idea to offer alerts on mobile phones when there was a riot or bombing. If the warnings offended government officials, the companies might lose their licensing.

Afghan phone companies turned out to be searching for entertainment services, such as voting on MTV-style videos. I delivered what they wanted, but I knew Danebarf needed to sell more profitable products to survive.

The real deathblow to my startup came when leaders of a nonprofit group abandoned plans to partner with me on two products, hinting that they felt my venture was too commercial. I had just about run out of my startup money. Seven months after I arrived, I decided it was time to wrap up.

What I learned is that I needed to allow more time to make my business work. I couldn't expect to find solutions to deep cultural differences instantly.

Now I'm building my sales skills at Adeara, a value-added reseller of computer systems in the San Francisco Bay Area. I would like to return to the developing world again as a social entrepreneur. And when I do, I'll make sure I have more cash to help me stay the course. - As told to Jeff Wise

Owner's Manual is written by entrepreneurs about lessons they have learned. Eaton Dunkelberger can be reached at edunkelberger.mba2006@london.edu. Please send feedback and column ideas to fsb_mail@timeinc.com. Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.