Teju Ravilochan is a co-founder of the Unreasonable Institute, which
accelerates entrepreneurs tackling global challenges with 6 weeks of mentorship,
access to capital, and a worldwide network of support. This is his second guest post on BOPreneur (here's his first). As my bleeps know, I am a believer in network building and open source innovation. As this post shows, however, it is much easier to say than to do, and this is a challenge to making the social enterprise sector more inclusive globally. What unreasonable steps can you take to help? What unreasonable changes could they make to the Marketplace?
The Trouble with Unreasonable Crowdfunding
Here at the Unreasonable
Institute, we believe in militant transparency. It’s a value coined by our
founder, Daniel Epstein, and it means being honest about the good, the bad, and
the ugly. This blog post involves all three.
The Good
When we began the
Unreasonable Institute, we did a lot of research about selection methodology.
We asked investors how they picked the entrepreneurs they invested in. We researched
hiring practices. We even looked at the Med School admissions processes. We
discovered that most of the time, written applications and interviews are poor
predictors of performance. What matters most is testing a candidate’s ability to do the job you
want them to do.
In addition to picking the
best possible entrepreneurs, we also wanted to generate revenue without asking
our participants to pay to attend the Institute. We didn’t want to make the
program inaccessible to deserving entrepreneurs who couldn’t afford it.
So we came up with the Unreasonable Marketplace, where we challenge our 50ish finalists to raise the
$10,000 it costs to attend the Institute. The first 25 to do so are the
entrepreneurs we accept. The best part? They are not allowed to pay it themselves. They raise it from others in small
increments (to avoid the “Rich Uncle Problem” of a wealthy connection giving
you all the money at once). Hypothetically, it was the perfect solution.
Candidates prove their ability to galvanize, mobilize, and raise capital, they
don’t pay for the program, and we generate revenue.
And surprisingly enough,
it works. Over the past two years, the 48 entrepreneurs that have attended
Unreasonable have raised a cumulative total $370,500 from more than 7,000
people in 50 countries.
But isn’t this unfair to
entrepreneurs from developing countries? It certainly appears that way if you
take a look at, for example, 2011 Fellow Moses Sanga. He didn’t have shoes
until age 13. He hadn’t seen a computer until he was 15. He is the first person
from his village to get a high school diploma. The nearest place to access internet
is 17 kilometers from where he lives, and he started his company with $500. But
while it would seem impossible for him to do so, Moses succeeded on the
Marketplace. He attended our 2011 Summer Institute, raised $60,000 and became a
TED Fellow.
And It’s not just Moses: we’ve
also had a former child soldier from Liberia, a Pakistani woman from a remote
tribal region, and a Nigerian farmer succeed on the Marketplace.
How did this happen? Even
we were surprised.
First, these entrepreneurs
worked hard. Khalida, from Pakistan,
went door to door in her village collecting cash contributions (which our
Marketplace can accept and verify). Moses visited CEOs of local businesses in
Kampala to ask for their help.
We also went to work for
them. We formed a partnership with HP in 2011, who generously contributes
$42,500 each year into a fund that the entrepreneurs on the Marketplace
allocate amongst themselves. The stated intention of the fund is to support
entrepreneurs from the developing world. We reached out to our mentor network
and asked them to support entrepreneurs from developing countries who they
believed deserved a spot. We reached out to press and landed stories in Forbes,
the Wall Street Journal blog, and even HP’s blog,
aiming to drive traffic to the Marketplace.
The Bad
But despite all these
efforts, we’ve observed that 85% of donations on the Marketplace come from
people who know the entrepreneur they’re supporting. Some US-based
entrepreneurs have still failed to succeed on the Marketplace and I by no means
seek to downplay the incredible accomplishment of raising $10,000 nor the
creative approaches that some of our entrepreneurs have employed. But this
means that ultimately, the Marketplace becomes a test of the size of your
network, more than it does your entrepreneurial ability.
The Ugly
So what does that mean? It
means our Marketplace, which we’ve spent thousands of dollars and hundreds of
hours building, is unfair. Entrepreneurs without large networks are flat out
disadvantaged in this process. And this unfairness is visible even on our current Marketplace.
Take a look at 2012
Finalist Narcisse Mbunzama. He’s a former child soldier from the Democratic Republic of the
Congo. He’s started an incredible company called Mobile Agribusiness. It
currently reaches 500 farmers, providing them information about weather, how
much to sell their crops for at the market, and information about how to better
grow their crops. Not only is it targeting a need for 80% of Congo’s population
(who are farmers), but Narcisse and his team built this company despite living in
a country where 5.4 million people were killed in the last decade in what has
been the called the bloodiest civil war of our time. And while three
entrepreneurs from Brazil and the United States have raised their $10,000 in 15
days, he’s only raised $70.
Don’t get me wrong. I love
our Marketplace. I believe in it. It selects entrepreneurs that are a perfect
fit for our program: those that are willing to take on the seemingly impossible
task of raising $10,000 in small increments from hundreds of people. And when
they show up in Boulder, they knock it out of the park.
But it pains me deeply to
see that by the merit of his work and effort alone, Narcisse is unable to get
more support. We’ve matched him with an Unreasonable alumnus to help him
strategize and shared his story with the press. But he, and other deserving
finalists in the same position, continue to struggle.
The reason we exist is to
create a world where no one is limited by their circumstances. We believe
coming to the 2012 Unreasonable Institute could change the lives of the
entrepreneurs on the Marketplace. It did for Moses. Our team now knows that we
must find a new solution next year to select our 25 entrepreneurs. And we will.
For now, we need help. The
Marketplace, which lasts 50 days, is just past its halfway point. If you
believe in entrepreneurs like Narcisse and in their work, join us. Help us bring them to the Unreasonable Institute. Help us help them to serve people who desperately
need their unrelenting drive, who need their determination to transform their
world. They just might define progress in our time.
