Last year I posted some details on our family's charitable giving to non-profits. So what's new for 2010? Where are we headed for 2011?
Friday, December 31, 2010
Sunday, November 14, 2010
Please check out the wonderful Slideshare "Creating Start Up Success" by Alex Osterwalder and Steve Blank which contains 5 rules for start up success. The basic concept is that no business plan survives the first contact with customers, and that entrepreneurs should spend a lot more time developing their customers and business model than a fancy business plan.
Wednesday, November 10, 2010
I am fortunate, in that I know some wise, interesting people. And some even answer my phone calls. One of them is Jill Bamburg, who is one of the founders of Bainbridge Graduate Institute, and who has both a broad knowledge of sustainability and many deep, provocative ideas on what needs to happen to "Change Business for Good."
Jill talked to my class today about her book, "Getting to Scale," and shared some ideas on what she thought needed updating, and what was still very relevant. Good stuff. One of the things she mentioned was that she was thinking a lot about the usefulness of the "Triple Bottom Line." She thinks that People, Planet and Profit are all important aspects of a good business, but that sometimes it tugs entrepreneurs (and intrapreneurs) in multiple directions. It makes it hard to determine trade offs. What if, she asked, there was just one "P" of purpose,* and the other P's were viewed as constraints? Would that be a more useful model for designing a beneficial business model?
Well, it's hours later, and I am still thinking about that extra "P". I have used the triple bottom line for years as a way to initially analyze a business idea or design a business model, but it does lack the crispness of a single focusing factor. Recently, I have been questioning what seems to be the deep seeded need of homo economicus to have a "bottom line." I mean, I lived for several decades without knowing what a bottom line was, and am not sure I am better off now that I know about three of them.
And if focusing on the bottom line got the planet into this mess, is focusing on three of them going to get us out of it? Maybe. But is a periodic reckoning what business is about? Are bottom lines what drive the innovation we need? Do people get up in the morning inspired by bottom lines? To me, entrepreneurship is more about route finding and adaptation than score keeping.
Maybe it is my outdoor background, but I respect businesses that take the cleanest line.** It requires practice, it requires crux moves, it requires trusting partners, it requires adapting to changing conditions, it requires economy of movement and it requires persistence. Not sure it requires metrics, or lots of people watching or offering advice from below. But it does require focusing on the journey, not just the destination.
Once you have locked in on "why," "how" becomes very important. While the end often does not justify the means, the means almost always affect the end. If you "fudge" on your eco-friendly product or act inconsistently with your values, you get knocked off line, and end up at a very different place than you intended. The ability to recover, and stay on line, separates the best from the rest. This is not to say, however, that having a clean line avoids difficult, high risk or chaotic periods. But with proper focus and training, I think it improves the chances of avoiding the the most dangerous threats, and recovering from mishaps.
As you scope out your line, keep in mind who it is for. It must motivate your team, and it must resonate with your customers. Investors? Do you need them to make it happen? If so, be sure they understand and support your line.
While expeditions used to take dozens or even hundreds of people, and large business ventures (railroads, Ford, IBM) took thousands, much lighter venturing is possible now. In the mountains and in business, the size of the venture and scale of its impact are delinking. Some may even see an inverse relationship. So choosing the right partners and packing light are important. Lean is the watchword.
So my botton line? Focusing on a clean line helps entrepreneurs think about making both the journey and the destination worthwhile. It can be helpful to use those triple bottom lines to design and train for your clean line, but once you have that line, you may be able to lighten up by tossing out all those bottom lines, and instead focusing on how your venture is going to get to where it needs to go.*** Plain. Simple. And very hard to do.
* Jill does not claim "purpose" as her discovery. Peter Drucker, Jim Collins and Rick Warren have all tread the "purpose" path. And I hear it was the buzzword at the recent Net Impact conference.
**not even original.
*** might I suggest a BHAWG?
P.S. I also like her idea of design constraints, which are often great ways to enhance creative problem solving. Perhaps another blog topic.
P.P.S. I am also bothered by attempts to out "green" others. Adding new lines or new adjectives to the old lines. Blended bottom lines, integrated bottom lines, quadruple bottom lines... is this really helpful? Or are these merely attempts to sell consulting services or yet another book on the topic?
Monday, October 18, 2010
Newsweek just released its green rankings for 2010 for the top 500 US based companies, as well as a global 100.
Dell placed first of the US based companies, and IBM topped the global rankings. Each received a 100. Maybe it's just me, but I think the esteemed panel was a pretty easy grader. And as an educator, I understand how pernicious easy grading can be. Grade inflation may make people feel good in the short term, but the lack of rigor impacts society in the long run. I hate to break it to you, but just as we don't all have above average students in our classrooms or above average drivers on our roads, we don't have above average sustainability efforts in our large corporations.
I understand that the methodology means the "100" is relative to others in their industry, but it still carries a connotation of A+. And I don't think any of these companies deserve an A+. If you take a look at Dell or IBM sustainability reports, you will see that they realize they have significant impacts on our planet, and much to work on. The problem with grading relative to others is that you end up with a "queen of the pigs" syndrome. Too often it selects the outstanding example of mediocrity.
There is no doubt that Dell and IBM are leaders in our current economic system which has recently emphasized reducing impact on the environment and being more socially responsible. But these companies are in no sense regenerative. They are still working on reducing negative impacts on existing ecosystems and communities, not recreating systems that will have positive impacts.* Doing less evil, while laudatory, doesn't earn a 100 in my view.
Instead, I'd ask "would the world be better off if this company made and sold even more of their stuff?" This query goes more to the essence of the business. Its reason for being. Perhaps Dell and IBM really do create high net value across their product offerings of disposable computers and consulting services. But companies whose core essence is "doing good" should rank higher. Those that provide environmental benefits such as cleaner air, purer water, or healthier ecosytems, or provide societal benefits such as education, health services, or ecofriendly energy. Those who truly have cradle to cradle supply chains, where their "waste is food." These are the ones for which I can answer "Yes, if they were more successful, the world would be better off." To my mind, there are no A+ companies under my scheme either, but I think it is a more useful question than comparing relative "green-ness." I don't give an A+ for good answers to the wrong question.
Perhaps I am quibbling over the A+ issue, and instead the focus should be on the bottom of the class. Some of the food processing and utility companies there, such as Monsanto, ADM, Duke and Edison, continue to underwhelm. These seem to be the trouble makers every year. Maybe Obama should start a "No Company Left Behind" policy for these poor performers. Others might argue that they should be put on probation, or expelled. And what about Peabody Energy? It seems like they never even came to school. I wonder if they think their absence was excused?
I tried to go back and look online at the 2009 Newsweek rankings, but interestingly, they all now link to the 2010 rankings (I do see they have maintained ranking Wal-mart above Whole Foods, which created a lot of controversy last year). I think I have a hard copy at home, and will take a look. My guess is that a lot has changed... which makes one wonder how sustainable one's sustainability ranking really is. I wonder how last year's "top ranked" companies feel? Has their performance slipped, or did the grading system change?**
So, kudos to Newsweek for tackling what is a slippery problem. They worked with experts at TruCost, and had a strong panel of advisors. But grade inflation seems to be a problem that is being felt outside of our schools, and I think it may be even more dangerous here.
A planet is a terrible thing to waste.
* I realize that relative to current competitors, it might be more eco-positive to buy a Dell computer compared to a competitive product. But the business model is still based on obsolesence and me replacing my computer every 2-3 years, rather than providing me with eco-effective/efficient computing services.
Saturday, October 02, 2010
In anticipation of SoCap, I thought I'd share my thoughts on several types of venture gapitalists, where they may be observed next week, and share a few concerns I have as this social capital ecosystem evolves. I am excited by the opportunities to be around so many leaders, but am also a bit anxious about the size of the crowd and the many great sessions which often overlap. So this post is also a way for me to organize my tour of the SOCAP zoo this week.*
Tuesday, September 21, 2010
My bleeps know I have been grappling with the idea of Venture Gapital for some time. Moving forward, in addition to covering BOPreneurs in this blog, I will also start to highlight Venture Gapitalists of note. In effect, to try to look at both sides of the table in this evolving dialog to build a healthier ecosystem of human, financial, social and natural capital. As always, bleeps, I'd appreciate your suggestions, nominations, props and criticisms. And I look forward to learning more at SoCap10 in a few weeks.
In functioning markets, a distinction is made between public and private goods, between street cleaners and vacuum cleaners.
• Where the poor live, private investment is often the only investment. The market, quite literally, becomes the sole provider of the common good.
In functioning markets, survival of the economic fittest is a necessary consequence of progress. Some businesses succeed, some fail.
• Where the poor live, the only ethical economic policy is not creative destruction, but creative opportunity.
As we cannot bomb our way to peace and prosperity, we cannot finance our way to economic justice. In the end, the poor must have the power to speak up, speak out and speak for themselves.
No economic theory and no marketplace, whether functioning or failing, can change a basic truth. As individuals, we are each blessed, and burdened, with a moral compass. Free markets mean each one of us has the freedom to make ethical choices.
Is social entrepreneurship about creating a viable asset class to make money in developing markets or about building a social movement for economic justice? Are we advocates for the poor or advisers to the well-off? (emphasis added).
I said, 'You are very comfortable with charity, seeing a 100% loss, send the money out and you never see it again, and you justify the good it’s doing in the world even if your metrics are fuzzy. Or you’re comfortable seeing 20% returns on your investments with no social impact, and potentially some harm. But you are so uncomfortable in this middle section, where you might get the money back, might not, or you might lose 20%.’ And he said, ‘Yeah, because you’re playing the game of business but you’re not taking it seriously.’
And I said, ‘I never said we were playing the game of business. We’re playing the game of creating change and we are using business as a tool. We are incredibly serious about these businesses succeeding, but we never forget that these businesses are about tackling poverty.' (emphasis added)
Sunday, September 12, 2010
I am reading Dan Pink's book "Drive." It discusses how people are motivated and inspired (or not) by what they do. While it doesn't explicitly address entrepreneurship, it does have some interesting applications to BOPreneurs.
Tuesday, August 31, 2010
Two of my favorites, Chip & Dan Heath, just posted six great tips for Elevator Pitches [those brief, compelling and credible descriptions of your venture that will motivate your listener to (a) tell others that they think could be interested/helpful and (b) ask you to tell them more]. Here are their six:
Friday, August 27, 2010
The Big Short, by Michael Lewis, is a great story. But it is also awful. To hear about the arrogance and ignorance of those who profited from the subprime mortgage market is at first unsettling, then disgusting. Unfortunately, in my experience, Laziness, Ignorance and Ego are often at the root of many such stories. The next big short will probably be on the next big LIE.
Monday, July 26, 2010
OK, you all know I am a big fan of Colorado. I love living here. But this week, I REALLY love living here.
Friday, July 23, 2010
When Paul Polak goes to events, he often writes "Troublemaker" on his name badge.
Thursday, July 08, 2010
We launched v4.0 of IDDS yesterday. While the core offering features remain (Innovation through Diversity, Creative Capacity Building, Community Building and Innovating for Impact) we have added additional functionality- new faculty (Jill, Bryan, Andy), new participants and a stronger emphasis on dissemination.
Tuesday, June 29, 2010
Past IDDS'er Joe Agoada has been on the road in Africa, bringing the World Cup to school children in remote areas. The tour will end with the World Cup finals. Joe's recent update on Kampala 2 Capetown got me to thinking.
Sunday, June 13, 2010
School, jobs, relationships, journeys... through life one accumulates many experiences. Surprisingly, however, few people pay much attention to externally validating these key experiences. Sure, you take a photo from that remote mountain peak or your visit to the Taj Mahal... but how can you let others know what you have done when you can't just take a picture? For many experiences, people don't take the picture when they are on the peak... they wait a while, and then try to recreate the moment by putting it on their resume. "See this picture from a magazine? I climbed this mountain." Wow.
Saturday, June 05, 2010
A friend asked if I planned to make it to the LOHAS conference in Boulder this month. LOHAS is short hand for Lifestyles of Health and Sustainability, a key market segment for consumer brands. I checked the website, and learned that this is an opportunity to "successfully approach the LOHAS consumers with your products and services. Network with like-minded executives from all LOHAS market sectors."
Friday, June 04, 2010
Next Billion is doing a series on educational programs and resources for students interested in market based approaches to development. They were kind enough to ask me to provide some information about our program at Colorado State. Here is a link to that post.
Friday, May 07, 2010
Thursday, May 06, 2010
I suggest to entrepreneurs that they use a simple matrix to think about scale. Basically, how will they make and market their first 1-10-100-1,000 ... 1 million products? Thinking about scaling up by log steps, basically.
Here is an example I used at IDDS last summer in Kumasi:
I know at Envirofit, it was hard to do each log step for our reduced emission cook stoves. We have now sold 100,000. But everyone is working just as hard (or harder) to figure out how to reach 1 million. And these aren't just iCandy for the masses. Every stove reduces pollution in a home and improves family health. Less smoke means less respiratory and vision problems (so I guess they are eyeCandy in a way).
Earlier in my career, I worked on a lot of deals. I found out that many entrepreneurs are motivated by a number. "I raised $x million." "I sold my company for $y million." I suspect that many social entrepreneurs are motived by some other number. "I saved x lives." "I moved y people out of poverty." Rare feats. But worthy goals. And worthy legacies if achieved.
Here are a few numbers that may help you think about log scales, your legacy and the logistics of serving large numbers.
- 10,000. Many products. Even maniacs. But not easy. Means you need to sell 27 a day for a year.
- 100,000. About how many Honda Civics were sold in US last year. It seems like a big number when you are selling stoves. But depressingly small compared to total market of 500 million households that cook with biomass. I can't do the math.
- 1,000,000. Number of iPads sold in April. Number of Toyota Priuses sold worldwide since launch: 1.6 million. Number of IDE treadle pumps sold in Bangladesh: 1.3 million.
- 10,000,000. How many miles George Clooney aspires to get in his latest movie. Nintendo has now sold 10 million Wii's. Grameen Bank has 8 million clients.
- 100,000,000. Annual number of beneficiaries of UN World Food Programme: 90 million. Number of polio vaccinations conducted by Rotary in India in 2009: 200 million. Number of iPods sold, so far: 220 million.
- 1,000,000,000. A billion. Worldwide there are an estimated 3 billion cell phone users. There are about 1 billion people living in extreme poverty. Nobel prize winner Norman Borlaug is widely credited with saving 1 billion lives through the "green revolution" in agriculture. To sell a billion products would mean 2.7 million units... every day... for a year.
My point? To achieve a legacy, you need to work on logistics. How will you serve your first customer? Your tenth? Your thousandth?**_________________ * My bleeps know I occasionally express frustration with oft repeated mantra of the need for "scaling up." I understand the sentiment, but perhaps better appreciate the difficulty. I would observe that "scaling up" has very little to do with talking about it.
Monday, May 03, 2010
John Gasangwa is a student in Colorado State Univerity's GSSE program. Here is his talk to a local middle school, providing them more background for their study of Hotel Rwanda. Here is his talk about the genocide, suffering, and forgiveness.
"I am telling you my story, so that you may build on it...you can build your character, you can build your community...and you can change the world."
Saturday, May 01, 2010
There are 67 days until the fourth annual International Development and Design Summit starts at Colorado State University. We have picked teams, accepted participants, and are spending a lot of time getting ready. It was exciting to see Amy Smith, who started IDDS and is our grand pooh bear, get recognized in the TIME 100 this week. But all of us are even more excited by the potential of the IDDS 50- the 50 participants from around the world who will be coming to CSU for the month of July.
For those of you who are DR100 fans, which is Paul Polak's idea of getting "Design for the Other 90%" courses and programs at 100 universities around the world, we are going to have some good news on that front soon too. I will keep you posted when I can say more. But tell your favorite design, engineering and business profs to block July 28-31... just in case something is going on then.
Lots of people have been asking me about what IDDS is, so here is some more information about IDDS- I have included links to the teams' websites where possible. If it reads a little like a press release, what can I say? Oh, and I will use twitter to update with #idds10. So now, when someone asks about IDDS, I can just say: "IDDS? Just check my blog and add #idds10 in twitter app." Or not.
"Imagine a team of top engineers, doctors and scientists working on a breast milk filter to prevent the transmission of HIV from mothers to babies. Now imagine that two African women, who work with HIV patients daily in community health centers and schools, join the team. For over 3 weeks, they learn together, work together, eat together, and live together. Now imagine a community of 10 such teams recruited from around the world, working with experienced faculty, practitioners, and mentors, each tackling an important problem facing the world’s poor. Each team designing a solution involving a scalable technology and a sustainable enterprise. This is the vision for this year’s International Development Design Summit."
The International Development Design Summit (IDDS) is an annual, multi-week, intense hands-on design experience that brings together people from all over the world and all walks of life to work on projects to improve the lives of people living in poverty. We held the first summit at MIT in the summer of 2007, as well as the second in 2008. The following year, Kwame Nkrumah University of Science and Technology hosted the summit in Ghana, where we were able to practice co-creation and work in villages in the surrounding area. For this year’s event, the focus has shifted from the creation of technologies to their dissemination. Co-sponsors MIT, Franklin W. Olin College, and Cooper Perkins will be joined by the 2010 host institution, Colorado State University, in developing and implementing the curriculum.
In addition to the dissemination focus of the 2010 program, a group of prior participants and faculty will work to envision future directions for IDDS while learning first-hand about the organization, culture and operation of the summit. This effort will allow the program to respond to growing demand, reach more participants more efficiently, and build relationships with other universities.
Over the past 3 years, we have grown the IDDS community to a substantial size with more than 150 participants from dozens of countries, inspired numerous participants through design, and developed many promising prototypes and projects. In 2010, we are emphasizing the creation of ventures and the production and distribution of products. Innovations to improve the lives of people living in poverty often require new business models, whether for profit or non-profit, in addition to new technology to be successful. The following projects will be hosted at this summit to develop sustainable enterprise models and plans for product production and launch:
AYZH (India): an IDDS spin-off that disseminates appropriate technologies, including a home water filtration unit and a birthing kit for mid-wives, to improve the lives of women in India.
Fuel from the Fields (Haiti/Rwanda): a project that creates micro-enterprises that produce clean-burning cooking fuel from agricultural waste materials.
Lo Chlorine (India/East Africa): an IDDS project for producing chlorine and dispensing it accurately to provide safe drinking water.
Solar Innovations Organization (Brazil): a project founded by an IDDS organizer to use solar technology to improve the lives of the urban poor.
Running Water (Kenya): an enterprise committed to using sustainable business models to bring clean water solutions to communities in Kenya.
Just Milk (Africa): an IDDS project that seeks to reduce the transmission of HIV/AIDS from breastfeeding mothers to their children.
SEED (Bangladesh/India): a venture that will provide affordable irrigation products for small plot farmers in Bangladesh and India.
ABARI (Nepal): a project for a low-cost treatment of bamboo to improve its performance as a construction material.
Sollys Lighting (India/Ghana): a collaborative effort of former IDDS participants from India and Ghana to provide low-cost solar lighting to rural communities.
Hippo Roller (South Africa/Ghana): a water-carrying device to reduce the work-load required to fetch water.
Each of these projects has had some success already, and IDDS 2010 will work to help them move forward and scale up. The distinguishing feature of IDDS will remain the same as in previous summits: diverse, multi-disciplinary teams will work on projects under the mentorship of international leaders in both technology and business development. In addition to internationally regarded faculty, a number of practitioners including designers, engineers, investors, and executives from design firms, development organizations, and start up ventures will be participating. The tradition of holding community events will also continue to more broadly inform others of the role innovation can play in addressing global poverty."
Wednesday, April 21, 2010
I just added links to both the Microfinance Open Book blog by David Roodman and the Innovations for Poverty Action blog (look to the right for my list of suggested blogs). Others more expert than I have weighed in on the debate of the true impact of microfinance on the poor (which I believe is a healthy one). And these two blogs are a great way to understand the debate. I'd start here.
That struts and frets his hour upon the stage
And then is heard no more: it is a tale
Told by an idiot, full of sound and fury,