The Six Lessons of Kiva


Stanford Magazine has a terrific article about Kiva called “Small Change, Big Payoff” by Cynthia Haven. This is the story of how Matt and Jessica Jackely Flannery created it to enable people to make micro loans to entrepreneurs around the world.

The results are awesome: more than 123,000 people have loaned more than $12.4 million to 18,000 entrepreneurs. In fact, there so many lenders that there’s are individual limits so that everyone can make a loan. The process involves reading a short profile about each entrepreneur and then deciding which to fund. From beginning to end, you can make a loan in under five minutes if you’re a slow typist. Lenders do not earn interest though the micro-finance organizations that helped Kiva find the entrepreneur does. Entrepreneurs pay 99.67 percent of the loans.

Here are some lessons that any entrepreneur can learn from the Kiva phenomenon:

  1. Create meaningful partnerships. Most entrepreneurs create partnerships to impress investors, journalists, customers, and parents. Hence, most partnership as bull shiitake. The best test of a partnership is whether its existence requires that you change numbers in a spreadsheet. No changes = b.s. partnership. In the case of Kiva, it has sixty seven partnerships with micro-finance organizations. It is these organizations that provide the “leads” for lenders to fund.

    Also, Kiva has partnerships with PayPal (free transactions), Google (free traffic) as well as with Yahoo!, Micorosft, MySpace, and YouTube. As you can imagine, these kinds of partnerships do make you reboot Excel.

  2. Catalyze and support evangelism. Like Apple, Harley-Davidson, and Tivo, evangelism starts with a great product, and Kiva has one. When you have a great product, then evangelists will appear, and Kiva has 250 active volunteers—what I would label “evangelists.” Kiva has really institutionalized evangelism if you ask me.

  3. Find a business model. You’d be surprised how many people wave their hands or avoid the topic of business model completely. Kiva’s model is a minimum $2.50 voluntary fee that lenders pay when checking out their “shopping cart.” If I understand this right: lenders receive no interest and pay a voluntary fee to Kiva in order to loan money. And you thought Google had a great business model—wow, as Wayne and Garth said, “We’re not worthy.”

  4. “Bank” on unproven people. What would the ideal background be of the founder of Kiva? Investment banker from Goldman, Sachs? Vice president of the World Bank? Vice president of the Peace Corp? Vice president of the Rockefeller Foundation? Partner at McKinsey? How about temporary administrative assistant at the Stanford Business School? Because that’s how Jessica started her quest. The spark that lit the fire was a speech by Muhammed Yunus, founder of the Grameen Bank and Nobel Peace Prize winner.

  5. Focus on free marketing. Kiva launched in 2005 with seven businesses in Uganda. The first “marketing” was sending out an email to the wedding invitation list of Jessica and Matt. All seven businesses were funded in a weekend. Then the Daily Kos picked up their story from a hacked together press release. Then PBS’s Frontline covered the organization and loan volume went from $3,000 to $30,000 over night. No road show. No Demo. No TechCrunch 40.

  6. Ignore the naysayers. The Flannerys got a lot of advice that you can’t send money around the Internet without government approval; that Kiva couldn’t scale beyond a few African villages; that a non-profit couldn’t offer an investment product; and that it would violate SEC regulations as well as the Patriot Act. Besides this, Kiva was a no-brainer. 🙂 - Chhorn Yan.jpg

Yup, there’s a lot any entrepreneur can learn from the Kiva story. More importantly, why don’t you go to its web site and make a loan? You could co-invest with me in Chhorn Yan, mother of six in Cambodia, who needs capital to expand her home-based, offline grocery store. One way to look at this is we could fund one Webvan or 800,000 Chhorn Yans.

By | 2016-10-24T14:17:38+00:00 November 28th, 2007|Categories: Entrepreneurship|28 Comments

About the Author:

Guy Kawasaki is the chief evangelist of Canva, an online graphic design tool. Formerly, he was an advisor to the Motorola business unit of Google and chief evangelist of Apple. He is also the author of The Art of Social Media, The Art of the Start, APE: Author, Publisher, Entrepreneur, Enchantment, and nine other books. Kawasaki has a BA from Stanford University and an MBA from UCLA as well as an honorary doctorate from Babson College.


  1. Read/WriteWeb November 28, 2007 at 2:04 pm - Reply

    Business Lessons from Kiva

    We’ve written about San Francisco-based, a not-for-profit organization that arranges interest-free microloans to entrepreneurs in developing nations, a couple of times before (here and here). Kiva has been a massive success story in the non-pr…

  2. Drew McManus November 28, 2007 at 3:08 pm - Reply

    Kiva is a remarkable site. They were certainly one of the inspirations for Bring Light. We aggregate micro-donations to help charities raise funds and help donors see the results of their donations.
    Glad to see Kiva’s continued success.
    – Drew
    Drew McManus
    Bring Light

  3. Florian November 28, 2007 at 3:24 pm - Reply

    Oh Guy, thanks for posting that interview. I did knew all that stuff about micro-credits and so on but wasn’t aware of the fact that there is such a great platform where I personally can actually get involved into this.
    I just enabled Regina in Paraguay to establish a butcher shop by lending her the first 10% for her business and about 10 minutes later, two other guys did like the same and now we’ve already raised 30% for her. That’s just incredible, isn’t it. It felt like is someone does the first raise, even it’s a small percentage, other people are way more likely to do the same – maybe they think like “oh if that guy actually believes in that person, the risk can’t be that high or there must be some reasonable thoughts to support that person – so i can do the same safely” or something 😉
    Anyway, that was just the thing I needed for today (more tonight, I’m from Germany and its almost half past midnight). Hope others also see the great thing they can do with so little to give.

  4. David November 28, 2007 at 3:51 pm - Reply

    What a great way to give back! And what an appropriate topic for the week after Thanksgiving and leading into the Holidays.
    Thanks for pointing this out.

  5. Pierluigi Rotundo November 28, 2007 at 4:29 pm - Reply

    Sometimes the Web 2 business models can be REALLY useful. This is one of those cases…
    Thank you Guy!
    Pierluigi Rotundo

  6. Advice Network November 28, 2007 at 4:30 pm - Reply

    For those interested in the subject of micro lending, there is a great video on the TED site here:
    About the Talk
    Jacqueline Novogratz is pioneering new ways of tackling poverty. In her view, traditional charity rarely delivers lasting results. Her solution, outlined here through a series of revealing personal stories, is “patient capital”: support for “bottom of the pyramid” businesses which the commercial market alone couldn’t provide. The result: sustainable jobs, goods, services — and dignity — for the world’s poorest.

  7. Allison November 28, 2007 at 5:53 pm - Reply

    Excellent article. Thanks. This might be the most important part of it though:
    > Ignore the naysayers.
    In order to have success, you have to believe in yourself and not allow the naysayers to drag you down.

  8. Alicia Loh November 28, 2007 at 7:07 pm - Reply

    Thanks for telling us about Kiva! This is inline with my new found aspiration after Grameen Bank. =D

  9. Ty Graham November 28, 2007 at 9:51 pm - Reply

    What’s really amazing is that a web 2.0 / .com site for helping entrepreneurs in America doesn’t exist. There are some mind blowing brilliant people struggling to make it right in your local area who are overlooked, undervalued and lack the financial resources to go to market without being taken advantage of by a VC or similar investor.
    I am an entrepreneur in with a billion dollar idea. It’s hard to believe until you see it. The personal sacrifices that I make to devote to launching my business puts me in the same category like many on Kiva. But where do I go? SCORE? VC? Angel? Right. I might as well give half my business up and forget about my dream.
    When I am successful, I will help people like me so there will never be another poverty stricken genius struggling to make a dream come true. That’s what keeps me going. Just have one more week to get through before I wake up the world, because soon, everyone is going to get blip’d!

  10. Sombit November 28, 2007 at 11:20 pm - Reply

    Guy, this is good advice. What impresses me most about Kiva is that Matt Flannery is so open about Kiva’s model. His blog on SocialEdge–– is a great step forward for the philanthropy/microlending sector.
    We at GlobalGiving have just launched a new blog called “GlobalGoodness”––and would love to hear what’s on bloggers’ minds. Check it out and let us know what you think.
    Sombit Mishra
    smishra at

  11. Jim Rudnick November 29, 2007 at 7:51 am - Reply

    Right on Guy! Like Kiva, and have been tracking their success now for more than a year! I think MORE bloggers should mention same too! And yes, I’m funding some folks too…and proud of trying to help others!
    Jim Rudnick

  12. The Bamboo Project Blog November 29, 2007 at 3:11 pm - Reply

    Watch Out Boomers–This is How Gen Y Gets It Done

    A few months ago I wrote a post entitled, Note to the Next Generation of Leaders: Don’t Wait for Baby Boomers to Hand Over the Reins. In it, I suggested some strategies for Gen X and Y leaders to develop

  13. Leading Questions November 29, 2007 at 6:40 pm - Reply

    Quick Takes: Kiva

    My experience with organizations has taught me that the great untapped, unrealized resource in all of life are the people at the bottom. Whether it is the love and commitment of employees for their employer, as strange as that may

  14. Albert | UrbanMonk.Net November 29, 2007 at 6:40 pm - Reply

    Heya. Kiva is a fantastic organisation, so thanks for analyzing it. I ran a charity competition a few months ago, and the people who participated could choose which charity I donated to, and Kiva came up again and again.
    Love what you’re doing with your blog.
    Albert | UrbanMonk.Net
    Modern personal development, entwined with ancient spirituality.

  15. Rob McNealy November 30, 2007 at 7:22 am - Reply

    This startup very much impressed me. I would love to interview them on my radio show. Does anyone know how to contact them?

  16. LivingHalal November 30, 2007 at 12:09 pm - Reply

    Great points Guy!
    LivingHalal is working on an interest-free loan model 😛 (cuz in Islam we can only take profit/loss but not interests)

  17. David Mackey December 1, 2007 at 2:41 pm - Reply

    I think Kiva is a great idea. Excellent article here as well.

  18. Dan December 2, 2007 at 10:40 pm - Reply

    Great business model. They are really impressive. Can it be replicated in other countries as well?
    -Dan |

  19. vincent December 3, 2007 at 9:33 am - Reply

    Great article!
    Check out this interview of Premal Shah, Kiva’s President, on

  20. name December 4, 2007 at 8:37 pm - Reply

    Ok. Here’s why I won’t lend money through Kiva. From their Terms of Use, Kiva claims IP rights to their user’s information.
    “If you post any messages or other information on the
    Website, then you hereby agree that such messages and
    information shall be considered Content, and you shall
    be deemed to have automatically granted, and
    represented and warranted that you have the right,
    power and authority to grant, to Kiva an irrevocable,
    perpetual, non-exclusive, fully paid, worldwide
    license to use, copy, perform, display, and distribute
    such information and content and to prepare derivative
    works of, or incorporate into other works, such
    information and content, and to grant and authorize
    sublicenses of the foregoing.”
    Any other non-IP-groping groups out there want my money? Kiva’s not getting it.

  21. Shakespeare's Fool December 4, 2007 at 9:01 pm - Reply

    Thank you for your comments on Kiva.
    You help me understand it better — that it is more than just a marvelous marketing idea for microcredit.
    You say “there so many lenders that there’s are individual limits so that everyone can make a loan.”
    People should know that there is no limit to what they can give to microcredit agencies like Unitus (which you have written about), Grameen Foundation (which I began supporting before there was a Unitus or a Kiva and continue to support because it’s the closest to Yunus and is as good as anything I’ve seen).
    You say another 800,000 Chhorn Yans.
    Unitus says this would be a good start. And says we could do about 395,000,000 more:

  22. Darren erick December 6, 2007 at 10:41 pm - Reply

    If you want to get more information about unsecured loans, personal loans, instant loans visit

  23. Nikole Gipps December 8, 2007 at 7:43 pm - Reply

    To the nameless one above — what exactly are you posting on their message service that you want to retain exclusive rights to? I don’t see that as being any different as using any website. The comments you post here could be considered property of Guy Kawasaki. Same thing for eBay, Craigslist, Twitter, or Facebook. Their servers, their content. Unless I’m misunderstanding what you are saying?
    RE: Kiva, the marketing flows so well because it has that instant feel-good factor. It’s true with anything in life, it’s the “What’s in it for me” factor. You can get a large population to jump on the bandwagon as their way of “giving back” to feel good about themselves. (I know that sounds cynical, but it’s just marketing truth.) It’s a great model, and certainly a great cause. It makes a lot of things possible for people in other countries that people in this country take for granted. Way to go Kiva!

  24. December 9, 2007 at 1:50 pm - Reply

    The Six Lessons of Kiva

    Stanford Magazine has a terrific article about Kiva called “Small Change, Big Payoff” by Cynthia Haven. This is the story of how Matt and Jessica Jackely Flannery created it to enable people to make micro loans to entrepreneurs around the world.

  25. Direct Response Radio Advertising Blog December 10, 2007 at 6:00 am - Reply

    Save the World?

    The December holidays are often considered times to express generosity. Gift giving is one of the ways we do that. But what if you find yourself giving just to “check the box” or to assuage a feeling guilt? A lot…

  26. Matthew Carroll December 13, 2007 at 1:42 pm - Reply

    Somewhat similar to the Christian Business as Mission Model (BAM)

  27. Karama Neal December 14, 2007 at 9:49 am - Reply

    Great post! Here are some other ideas for participation in microcredit around the world and in the US:
    Happy lending!

  28. Marketing & Strategy Innovation Blog May 27, 2008 at 1:47 pm - Reply

    The Six Lessons of Kiva

    by: Guy KawasakiStanford Magazine has a terrific article about Kiva called Small Change, Big Payoff by Cynthia Haven. This is the story of how Matt and Jessica Jackely Flannery created it to enable people to make micro loans to entreprene…

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