The Tangled Web

There is an excellent and disturbing special report in the June 2008 Fast Company on China in Africa. Analogizing to the attack of an intestinal parasite on its host, Richard Behar looks at the impact of the globalized web of commerce between the U.S., China and Africa.

Behar examines China's acquisition of natural resources in Africa, timber in Mozambique, mining in Zambia and the Congo, and oil in Equitorial Guinea. In all, the pattern of exploitation is similar- massive low cost extraction, infrastructure rich deals with the (often corrupt) governments, and little regard for the workers or environment. Competing with the distracted U.S. and the hamstrung Euros, China has become the partner of choice for Africa. While we look at Africa as a charity case, they look at it as a naive business partner with needed resources. As one source states: "China is very clear about what it wants from Africa. Africa has no idea what it wants from China."

China's trade with Africa is now over $73 billion, an increase of 30 fold in less than a decade. It's investment is at $2 billion and growing rapidly (though still smaller than US). As the article points out, this investment comes with fewer rules than western aid... no calls for better governance, human rights or environmental stewardship. Although there are often political deals and requirements to use Chinese firms for services.

What is China's end game? According to the article, "whether or not the world's key resources are running out, China is behaving as if they are." Economic growth is vital to avoiding political unrest at home, and the manufacturing economy requires a steady supply of natural resources as well as demand from Western markets. Behar speculates that China's end game is to "opt out of the international commodity markets" by going to the source and locking up long term rights to resources. Africa is "now the scene of one of the most bare-knuckled resource grabs the world has ever seen."

The Nature Conservancy has pointed out that there is a poverty-conservation equation, which can lead to either negative or positive reinforcing resource spirals. In the negative version, poor people exploit a natural resource, which diminishes the value of the resource, which makes them poorer. This article points out a number of examples of where this is happening at a large scale in Africa. Five out of every 10 tropical trees traded globally are bound for China, with estimates that most of these are harvested illegally. In Mozambique, it is estimated that Chinese interests control 90% of the available timber. Luckily, there is one poor (easily bribed) enforcement agent for every 125,000 acres of forest!

It is enough to make you sick. But then, Behar throws in our own complicity in this tangled web. Who is China's biggest customer for furniture and flooring? You guessed it, the U.S. And the US and Europe have little to crow about when it comes to development of Africa. Centuries of European colonization, followed by decades of ineffectual aid (well, it was ineffectual in decreasing poverty and disease or developing their economies, but it was "effectual" in propping up despots).

As Behar concludes, the China-Africa-US relationship is like a complicated host-parasite relationship. "We buy China's junk, they buy our bonds, our real estate, even our corporations; they expand into Africa with our money, enabling them to grow and sell us more junk." He is not hopeful that we will "outthink the global consumption death spiral we have all set in motion."

This article was a tough read for an unrepentant optimist, I'm afraid. The history of resource rich countries is not a reassuring story for Africa; it is the Singapores, not the Congos, that build stronger economies by investing in building human capital, instead of extracting natural capital. The global supply chain is a complicated global web, and sometimes consumers would rather not know the truth behind what they are buying. Has China replaced Wal-mart as the new evil empire at the center of this global web? The group that has ruthlessly and relentlessly pursued low cost sources, so we can buy more stuff, cheaper? And that we can then blame when we find out that they exceeded our expectations. Or have we met the enemy spider, and he is us?

Get some TED for your Head

So the TED folks have been posting a lot more of their talks recently, which is cool for those of us who aren't cool enough to actually go to TED. I was thinking of posting my top ten favorite TED talks, but then I thought that I would try to do some intersectional combinations. Where the whole is greater than the parts... synergistic neurological stimulation... pairing red wine with fish. Whatever. Watch them together and it will be better.

So here goes:

Design 2.0: Bill McDonough, Amy Smith and Janine Benyus

Some BIG questions, two BIG brains, one BIG ego and almost a small synthetic life form: Stephen Hawking and Craig Venter

Two very different ways to present your ideas: Bill Strickland and Hans Rosling

How do you want to spend $50 Billion? Bjorn Lomborg, Andrew Mwenda and George Ayittey.

And a bonus entertainment clip, the Raspyni Brothers (don't stop with the bean bags)!

Enjoy!

Sticky Dandelions

I have a dream (yes, middle aged white guys can have dreams too). My dream is that students in CSU's Global Social & Sustainable Enterprise program will become changemakers. People who change the world. All of 'em. Year after year. Around the globe.

The image for my dream is that we are blowing on a dandelion. Each year ~25 students will take off, starting new enterprises, or taking on important projects at leading organizations. Like dandelions, these will take root and spread. Their work will empower and inspire others, becoming seeds for other entrepreneurial ventures.

What does this have to do with stickiness? Well, as my regular bleeps know, I am a big fan of Made to Stick. I first wrote about this fascinating book in my February 2007 post "Stickiness, Serendipity and Dissonance." Since then I have referred to it often, and have now used it in several of my graduate courses. It is a student favorite. To quote from my "SSD" post:

"The premise is that there are some things you can do to make your ideas more likely to stick...think of the power! If only 1,000 people buy this book and make their ideas stick, instead of having said ideas slip into oblivion, it will have made a big impact. And if the cover fools a million people into buying this book…well, you get the idea! The world could be a very different place indeed."

Well, way more than a thousand people bought Made to Stick. Over 160,000 copies have been sold in the past year. It's on the Business Week best seller list. So their message is spreading and sticking. The reason it is popular with students is that it helps them design their ideas. Pretty much everyone has a great idea from time to time. But many of these ideas never go anywhere. They either get stuck inside (due to being busy, lacking confidence or lacking resources) or they get stuck in the network. Kind of like a dropped call. They just don't catch on. Designing an idea using the Made to Stick SUCCES approach can help you get your message out on the network, and help it become "sticky" or even "magnetic" (what it needs to become to start an enterprise).

To (finally) get to the point of this post, Dan Heath, one of the authors of the book, visited Fort Collins this past week. He started off the session talking about our GSSE program, which he had heard about from one of our students. Very cool. He did a nice job of summarizing the book, demonstrating "how to" give a compelling presentation (almost all pictures, few words/slide), and having the audience try a few exercises. How to make CFL bulbs stickier? "It's like a Prius for your house."

Anyway, after the talk, I spoke to Dan briefly, and asked him to sign my well thumbed copy of the book. I asked him to put in the message below. He asked what it meant, and I told him I'd blog about it. Thanks, Dan, and now I hope you understand.

Reducing the Carbon Footprint of Beer

Take a look at "Drink Beer, Save the World" and the YouTube clip.

Very innovative idea from the Carrot Mob. A reverse boycott for an environmental cause. I like it.

Pitching Your Numbers

Presenting financials by Powerpoint is difficult. It is a great example of where the "Curse of Knowledge" can hurt you. You know the numbers, so you flash them up on the screen and move on to the next slide. The problem is that your audience isn't as familiar with your business and financials, and you have just lost them. That's not good.

Here are a few ideas that I think will help:

1) Think "essence". What is the headline for each slide? Does it convey that you are building value with your venture? Consider a "text box" at bottom that also gives a key point ("we break even after 14 months of operations" or "revenues from carbon offsets and our organic twill caps will exceed the federal budget deficit in 2 years").

2) What are the KEY numbers that demonstrate how your business is sustainable (in a Triple Bottom Line kind of way) and the scale it achieves? Can you show these over the relevant projection period (usually 3-5 years). Think 3x5. Three rows x five years. Or 5 rows x 3 years.

3) Pick a period that shows your business becoming at least a teen, or maybe a grown up. Projections that show losses for a number of years, followed by one year of marginal profitability get an "L" for "Loser". Investors aren't interested in seeing your "baby pictures" for the business. What does your venture do when it's a grown up? (For those of you who are parents, you know now why no one believes an entrepreneur's story, since we have no idea what our child will be when they grow up, or our business. But we know our dreams, and those may indicate what type of parent/founder we will be.)

4) DON'T put up a slide with a lot of numbers unless you plan to talk about all (or at least most) of them. If you don't plan to talk about a number (or at least that series of numbers), why is it there?

5) Graphs help, but again, you need to talk about them, and tell the audience what the essence is.

Following Kawasaki's 10/20/30 rule, and his Art of the Start recommendations for the 10 slides for a pitch, you really should be able to cover the financial aspects of your business in 2 slides. More detailed discussions of financial projections will occur at a later date, IF you connect with your potential investor with the initial pitch.

Educational Arson

In January, I blogged about the need for "Disruptive Education." Many who believe that the current economic system is unsustainable think that the fixes will come from governments or big multinational companies. Not me. I am rooting for the entrepreneurs. And I think that the change to new technologies may be more rapid and disruptive than many expect. Many of our current large institutions are dinosaurs, built on a petro-economy. They may be replaced, not rebuilt. We are going to need a generation of new entrepreneurs. Revolutionaries with business models.

What is the role of a teacher in "disruptive education"? Well, I have started to introduce myself as an Educational Arsonist. Now, before you report me to the university's Board of Governors, let me explain what I mean. And provide some examples.

A little background on my educational pyromania. One of my alltime favorite quotes, from Jack London, is "I would rather be ashes than dust! ...The function of man is to live not to exist. I shall not waste my days trying to prolong them. I shall use my time." The reference to ashes is that they are the byproduct of fire, combustion, and explosions, while dust is the byproduct of slow decay.

Keats wrote: “Education is not filling a bucket, but lighting a fire.” When I began teaching 5 years ago, this quote inspired me, and it still does. My best teachers lit me up. The worst poured water on my fire. This quote made me realize that my role was to be an educational arsonist, not a member of the faculty bucket brigade. Particularly when teaching budding entrepreneurs, who are so often told that their idea won't work, that they are too young, and that they should take a less risky path.

So, here are some stories.

DC is a business student who took a class from me two years ago. After spending some time abroad, she is back at CSU and asked me to supervise some research on how to use enterprise based models to improve secondary education for girls in the developing world. It is great to see the spark in her eyes as she talks about various initiatives around the world, what's working, what isn't and trying to figure out why. She has also plugged into a powerful group of women from leading NGOs and companies that want to help her out. Next fall, she will start with the Peace Corps. Over the summer, she has been offered a research job to continue work in the area. I look forward to the many worthy things this young lady lights up with her enthusiasm and passion.

I have already posted on Phones4Loans, but this group is blowing me away. This project is a wildfire of enthusiasm. Take a look at the rapidly evolving website. Tyler has put together a great intro video, the team has drop off locations all around town.... We have students from across campus working together. Talking to local businesses about e-waste and microfinance. Doing interviews. Setting up websites and supply chains. What a combustible mix.

Lastly, our GSSE students are getting ready to head off for the field project part of the program in May. We have teams going to Peru, Mexico, Nepal, Ethiopia, Zambia, Cambodia, India and Pakistan. Working on energy saving technologies, protecting biodiversity, affordable green housing, and helping establish new markets. Take a look, if you can stand the heat.

This is why I teach. I hope it doesn't get me fired.

Pump It Up!

Good posts recently on Next Billion and Guy Kawasaki blogs on water. I'd encourage you to hit the links in both posts.

Guy's post highlights See-Saw and Merry-go-Round pumps. These get a lot of attention from the donor community and cause some grumbling from water veterans. The grumbling is about the high cost compared to treadle pumps, for instance. Do you want one Merry Go Round pump or xxx treadle pumps? They are for different applications- irrigation vs. drinking wells. The issue of cost is significant, as well as the fact that these play-pumps, by their nature, are mostly driven by charity, rather than commerce (which is a whole 'nother discussion, right?).

To me, there is something very intriguing about replacing drudgery with play as a design goal. Who will figure out how to reduce the price on making play a productive source of energy? How do we combine Paul Polak's "extreme affordability" with "playfulness"? One of our GSSE teams is working with Paul on a low cost microengine for pumping... treadle pumps often take several hours per day to operate, in hot, humid climates. More efficient than water buckets hauled from the river, but still drudgery.

Sprig Toys, a recently funded start up in Fort Collins, may be one of the players.* They have been working with Freeplay to develop battery free toys. These guys do so much more, and helped us a lot with the design of the new Envirofit cookstove. Without giving away any company secrets, I'd suggest you keep an eye on this creative group.

The other exciting thing I've recently heard about with water is Paul Polak's D-Rev project to do low cost water purification kiosks. I can't find much webinfo on this, so to hear about it you have to go to one of Paul's book pitches. Check here for an event in your area.
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* These guys are awesome on so many levels. They are the first start up I know to get significant VC funding with a comic book business plan! And they took our Envirofit birthday party up a notch, both in fashion and intensity.