What is the first thing in your mind about a bank that is lending money without collateral? The story of the Grameen Bank is inspiring for many because it brought many people out of poverty through micro-credit and made us re-think how the banking should work for the bottom of the pyramid.

Muhammad Yunus, the founder of the Grameen Bank, who won the Nobel Peace Prize through his work with the Grameen Bank, shared his story in this book. Starting from his early childhood in Bangladesh, his adventure of going to abroad to earn a doctorate degree, his involvement in Bangladesh independence, to the founding of the Grameen Bank.

The book detailed on how micro-credit, could be used to improve the living conditions of the poor and eradicate poverty.

Unless we create an environment that enables us to discover the limits of our potential, we will never know what we have inside of us.

The Grameen Project started at the University of Chittagong in Bangladesh, where Muhammad Yunus was an economic professor. During his tenure at the university, he conducted a study with his students to understand poverty by going door to door.

Prof. Yunus figured that poverty is like a cancer, once a person got into poverty, it’s very difficult (or almost impossible) to get out. A poor person would work very hard, and would only earn so little (approximately 2 cents) to scrap food for the day. The next day, the poor person would repeat the same exact work, and the cycle would just keep repeating.

Why would a person work very hard, and earn so little? Because a free market isn’t available for the poor. Instead of selling their goods for a higher profit in the open market, they are forced to sell their goods to the shark money lenders who gave them the capital at a very high interest rate (as high as 10% per week). The money lender would pay so little to make sure that the poor who borrowed money from them are kept in the poverty cycle, so that they could keep getting goods at a very low rate.

Usually the borrower will have to borrow again just to repay the prior loan, and ultimately the only way out is death.

Looking at this situation, Prof. Yunus heart was moved and lent $27 to 42 poor people. The $27 allows them to pay back their previous loan, and provided capital for their work that they could sell in the open market at a higher rate. In addition with getting them out of the poverty cycle, all 42 people pay back the $27 to Prof. Yunus.

From this experience, Prof. Yunus thought of institutionalizing this model to solve poverty in Bangladesh. There are many challenges of starting the Grameen Bank, both culturally and politically. There were push backs from the religious leaders in certain villages where the Grameen tried to enter with an idea that the Grameen is a Christian organization with a goal to convert the religion of the people in the village.

There were also push backs from the national banks incumbents with various skepticism. They thought that the micro-credit model that the Grameen introduced would be very expensive and wouldn’t work economically. Prof. Yunus proved them wrong by replicating the model in multiple cities in Bangladesh with a very high repayment rate (about 99.8% at the time).

Grameen is like my mother. No, Grameen is not like my mother, she is my mother. She has given me new life.

The Grameen loan gives an opportunity for the poor to start a micro business. Whether it’s making a bamboo baskets, or farming rice paddies, or sewing clothes, the loan provided a capital for the poor to get started, which would otherwise be going to a loan shark. The traditional bank wouldn’t lend them money because they don’t have any assets for collateral.

The first loan is about $12 to $15, and this is the biggest amount of money that many of the Grameen’s clients have ever hold in their life. It is interesting when the book described the experience of people receiving the money for the first time. Some were very nervous when the money was handed out. Many couldn’t sleep the night prior to getting the money, and some kept thinking to bail on the day they were suppose to be getting the money because of the cultural push backs.

We discovered that the formation of a group was crucial to the success of our operations.

group membership creates group support and group pressure and smoothes out behaviour patterns and makes the borrower more reliable.

if any member of the group ever gets into trouble, the group usually comes forward to help out.

The mechanics of the loan and its re-payment process is only briefly described in the book. The idea is a borrower needs to be part of a peer support group, who would have a regular meeting. A group is about 5 people with similar economic situations. The peer support group also have regular meeting with the group centers. The group centers consist of multiple peer support group with a representative from the bank. A representative from the bank would go to 10 different centers a week.

The peers influence in the group is very strong because when a member defaulted a loan, no one in the group could get a loan. In practice, everyone in the group is making sure every members in the group pay back their loans.

The Grameen loan is not simply cash, it becomes a kind of ticket to self-discovery and self-exploration.

The borrower begins to explore her potential, to discover the creativity she has inside her.

I would say that with Grameen’s two million borrowers, you get two million thrilling stories of self-discovery.

The micro-credit model that the Grameen Bank introduced gave an opportunity for the poor to get out of poverty by providing a very small amount of capital to start a micro business.

Conventional banks have built their credit institution on the base of distrust. But for Grameen ‘credit’ means ‘trust’.

As of July 2020, the Grameen Bank has disbursed $30 billion of loans with 99.2% recovery rate.

There are some articles and case studies who argued the definition of recovery rate that is used by the Grameen Bank isn’t the same as the traditional bank because they automatically converts the basic loan to a flexible loan when it doesn’t get repaid.

Today, the Grameen Project has been replicated in various parts of the world.

I’ve also included the case study from the Columbia University on the Grameen Bank, which is an interesting read to understand the economics of the Grameen Bank’s micro-credit model.

A story about racial injustice. A story about perseverance. A story about a family who dare to dream, despite of all the odds against them.

The book describes in detail what a life looks like under racial injustice, violence, and threats. It gives different perspective on how people under different circumstances operates and live. A perspective from a young boy growing up in such a neighborhood.

Trevor Noah was born in South Africa in 1984. At the time, South Africa had a social system called apartheid.

Apartheid was a police state, a system of surveillance and laws designed to keep black people under total control.

It’s similar to the segregation system between the black and whites in the United States, but worse, because the state also control where the blacks can and cannot live. Apartheid was then abolished by the movement and uprising of Nelson Mandela.

The book described the childhood of Trevor Noah, how to live a life of a crime. Trevor Noah was born as a result of a crime, because under apartheid, it was illegal for people in different racial background to have a sexual relationship. Trevor’s mother (Patricia) was a black female of Xhosa tribe, and Trevor’s father (Robert) was a white male from Swiss.

They couldn’t walk around the park together, holding hands (or walking side by sides) because they were afraid of being questioned and reported to the authorities. Trevor was considered too light skinned. In public, Trevor’s parents had to pretend that Trevor wasn’t theirs.

she was preparing me to live a life of freedom long before we knew freedom would exist.

Trevor’s mother was a rebel and strong headed. She does not follow the rules. She always find loopholes in an unfair system and exploit them. Trevor’s mother taught him to dream and had huge influence in shaping Trevor’s personalities. She taught him that the circumstances of today, does not necessarily determine his future.

Not surprisingly, Trevor’s childhood was also a filled with his rebellious acts and naughtiness. He loved it. He loved to be naughty. He got into jail for driving a car without a registered license plate.

Trevor was also an entrepreneur since he was young, he had a business of selling pirated music, movies, and PlayStation games, and providing DJ services for the neighborhood.

We tell people to follow their dreams, but you can only dream of what you can imagine, and, depending on where you come from, your imagination can be quite limited.

The book also provides fairly detailed insights and perspective of the environment that Trevor was living in. The struggle, comfort, and tricks to get around.

The community influence in the neighborhood is very deep and ingrained with everyone. It is good and bad at the same time. It’s good because if you’re poor, the community is very supportive to each other. The community is always trying to help each other. If a mother of one of the household needs someone to run an errand, you are obligated to help her out.

At the same time, it is bad because the community also holds you back from becoming too successful. As part of the community, there’s an expectation to help others that are in needs when there’s an excess of money.

Trevor also talked about the Black Tax. It’s the idea that the younger generation of black family, are responsible to help the previous generation paying off their debt and fix their finances first.

My mother’s greatest fear was that I would end up paying the black tax, that I would get trapped by the cycle of poverty and violence that came before me.

Unlike most people however, Trevor knew that he doesn’t exactly fit to any of the community. He always played along, and it turned out that he is very good at this. He got along with people very well, but deep inside, he knew that he wouldn’t get stuck with them forever. If he had to leave, he would.

We spend so much time being afraid of failure, afraid of rejection. But regret is the thing we should fear most. Failure is an answer. Rejection is an answer. Regret is an eternal question you will never have the answer to. “What if…” “If only…” “I wonder what would have…” You will never, never know, and it will haunt you for the rest of your days.

The book does not go beyond the life of Trevor Noah in South Africa. It ends with the story of Trevor’s mother. Her life with the second husband, in domestic violence, and how this has impacted Trevor’s life.

Company culture is something that we, as founders, talk on its importance. But how many times we intentionally build, think, and find ways to cultivate them.

In this book, Reed Hasting and Erin Meyer shared many insights from the study of their own cultures at Netflix. There are also many commentary from Netflix employees describing their experience working there.

If you’re running and building a technology company, this is a must read book on building a brutally honest culture for innovation.

Seek to hire the very best and then inject fear into your talented employees by telling them they’ll be thrown back out onto the “generous severance”

One of the most unique culture of Netflix is to inject fear into their talented employees. In exchange, the company is making sure that everyone in the company are highly compensated at their respective field.

The way they do this is also unique and pro-active, embedded into the workplace culture. For instance, employees are encouraged to speak with headhunters to get insights on how much is the market compensation for their role.

Netflix don’t make salary adjustment based on the performance of the employee, but based on the market. They don’t have (and not want to have) the Key Performance Indicator (or KPI) that are commonly used in traditional corporations.

KPI doesn’t make sense in the fast growing company because it was pre-determined in advanced, so it may lead the employee to keep doing something that may not be relevant anymore. For instance, at a certain stage of a company retention rate may be the more relevant success metric, not user acquisitions.

One Reason for Netflix’s Success—It Treats Employees Like Grownups.

It is a brutally honest culture because they don’t give a false sense of reality to their employees. If the employee is only performing adequately, they will not hesitate to fire them. And for many, this is a fair exchange when the company is making sure that they are paid at the top of their field.

The book also described that companies are making a mistake when they treat their employees as family. Employees are more like professional sports players, than a family.

In a family, we’re stuck and just need to accept weaknesses of our family members. In a professional sports team, the coach will almost always exchange a sub-par player for a better one.

Know effort isn’t enough, recognizing that, if they put in a B performance despite an A for effort, they will be thanked and respectfully swapped out for another player.

It’s about results, not effort. Recognizing that the best effort of individual, may not be good enough, is one of brutally honest things that the company does.

For people who value job security over winning championships, Netflix is not the right choice,

The company also recognize that their culture isn’t for everyone. They are making this loud and clear to make sure that everyone in their team (and to those that are considering in joining Netflix) are in it to win the championship, which is also a good screening method.

But for those of you who are operating in the creative economy, where innovation, speed, and flexibility are the keys to success, consider throwing out the orchestra and focusing instead on making a different kind of music.

Netflix culture is illustrated as a jazz, where the actual music may have some variances, but everyone in the orchestra agreed on the fundamental principles of the music notes.

The culture is designed for speed, agility, and adaptability for change. It doesn’t have much rules and process. They teach and expect every employee to act on what’s best for the company.

Our North Star is building a company that is able to adapt quickly as unforeseen opportunities arise and business conditions change.

The book also describes on their experiences of adapting Netflix culture in different parts of the world, taking considerations of different cultures.

It would be interesting to see if there’s a company with Asian root implement Netflix-like culture.