Stoves Project in India

The following is an email from Chaun Sims, who, along with engineering student Sachin Joshi, is working on our project in India. This business plan started in a CSU class last year when Chaun was a senior business major and Sach took the class as part of his PhD studies.

The cook stove uses a thermo electric generator to produce electricity which can then be stored to run lights or a radio. The stove replaces a cook fire inside the home. Beyond the light, it uses less than half as much wood, and vents the smoke outside the home. The stoves protoypes are being made by Jaynix in Nashik, and then transported to Ahmedabad. We were introduced to Jaynix by Vinod Parekh, an amazing man who coaches entrepreneurs in India, along with his wife Kamala. I met Vinod through a Rotarian, when he had hosted a student from CSU in 2005 who was studying microfinanced projects nearby. We are working with SEWA Bank and SELCO on this project on user and technical suport side. This project is being funded in part by the NCIIA and the CSU Global Innovation Center.

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Dec. 11

Arrive Mumbai and travel to Nashik - hrs. meeting with Vinod and dinner discussing the TLC group and local mindsets/objectives. Also talk about his and his wife's personal involvement with the community, entrepreneurship projects and their mind sets.

Dec. 12

Ample changes had to be made to the stoves. Some braces had to be added to the legs, leg extensions had to be made for all of the stoves as the stovescurrently sat on the ground. There was a bit of artist interpretation with the combustion chamber. Instead of using only one layer of fire brick and then a heat resistant material behind it, the entire chamber was filled with brick and mud. This made one end of the stove incredible heavy. The stoves totaled 50 kilos each. We had adequate space and help to work in but we were stationed in a operating workshop that was incredibly loud. You could not speak to anyone or yourself unless you yelled. We got 2 stoves assembled and fired on the 12. One 8w and one 16w. Everyone was very happy to see the stoves in operation. However, we fried a module because we installed it backwards. The need to take a deep breath and slow down became apparent. Parts are to be sent from Colorado and the 4 test stoves will have to be installed in Ahmedabad after Sachin and I depart. We worked until 12 pm when the factory closed. It operates 12 hours a day 6 days a week. Jaynix, our prototype manufacturer, is a family run business and is located in a industrial area that is very busy and most places operate 24/6. Ninad was a very good host and was gracious to pick us up every morning and his mother has been kind enough to feed us the best Indian food I have ever had each day at lunch.

Dec. 13

More changes were being made as some tolerances were too close and others too far. The stoves had to be sealed so that smoke would not leak out and then wehad to break them down for shipping. We were able to do all of this in time to begin the 4 hour trek back to Mumbai and catch our 9:45pm flight to Ahmedabad. Sachin was a machine, talking in Hindi and English non stop to a slew of workers, Ninad, Nikel and Prashanth. Prashanth is a Asst. manager at Selco and he was in Nashik for the duration of our stay. We worked with him to complete the stove and educate him about our technology. He took a 8w model of the stove back with him to Bangalore for field testing. We crammed into auto and began the journey back, only to be re routed through the country side due to a traffic jam. Barely making it to the air port in time I had to remind Sachin to trust Ganesh and to not worry, because everything will be ok.

Dec. 14

We made it to the Center for Environmental Education(where we are staying) and it has been go go go. We planned to get a jump on things and we head to SEWA headquarters first thing at 8am. Come to find out, they do not open until 10:30. The day begins and we go to locations to check out the possible test homes. We begin surveying and gather 11 pages of information from 3 households. We were certainly a center for attention and a picture was worth a thousand words as we used a photo of the Starlight Stove to explain things about it to users. None of them had ever heard of a smokeless chula or anything about a stove that produced electricity. We went to gather the stoves which was quite a task. Travel to the transportation company was approximately 40 min away and we had to do some detective work in order to locate the stoves. We got them by dark and returned to SEWA. Tomorrow installation begins.

Dec. 15

House #1 is in a slum. It is a one room shack with a tin roof (pieces of tin laid on top of each other). A Selco solar unit is installed in the home next door and a bank sati is at the home. The same bank sati was at the houses we toured yesterday. Time begins to pass and a simple installation escalates. We have to get the stove welded on to repair a brace for the legs that wasdamaged during transport. During our travels in Ahmabaded we have been accompanied by 2 selco technicians and one representative from Small Scale Sustainable Infrastructure Development. It has been very enlightening speaking with them about endeavors in India and also getting their thoughts on everything. They are able to communicate with users in Gujarat and also speak with us in English. We successfully install the first 8w stove with a datalogger and depart around 4pm. It is getting too late to start the second installation and everyone is tired. Oh, we forgot to eat. SEWA works from 10:30 am to 4pm straight with no breaks. No one eats breakfast besides Sach and I and some days we start to early and no restaurants are open to get breakfast. So, the one or two meal a day plan did not pay off today and we will have to try again tomorrow.

Dec. 16

SUCCESS! The final 2 stoves we plan to install are in! We began at 7am and the ass kicking did not stop until 5pm. We traveled approximately 1 hour to a village where a lady cooks lunch for approximately 25 gas workers. We installed a 16w stove with a data logger. They have a abundance of wood here and it is nice to be away from the city. Getting to the village proved to be interesting as we had to pass a toll area that was very slow and inquisitive. Nonetheless, we prevailed and installed a stove. Many good pictures and video has been taken. Did this installation in 3 house time and headed for the next stop. We are on a tight time line as Sach has to catch a plane and our driver needs to be finished in the evening. We get right to work and install the final stove in 1 hour. We had ample assistance from a wide arrangement of curious neighborhood boys. They think Sach looks like Jackie Chan (they keep calling him Jackie Chan and asking him to do karate moves...its great) at first he was put off by it but now he is dig'n it. The kids let me fly a kite, but I allow it to sky bomb and soon there is no more kite to fly. We head off to drop the last stove. This stove is put in the home of a seamstress. She has a foot operated sewing machine and we leave the stove here so that I can be installed later by a Selco tech when some parts arrive.

Well, that's where things are currently. Sachin is catching his plane to Nepal and I am scheduling a meeting with Sharmila at Sewa. I would have liked to write daily but our schedule has not allowed me to do so. Sahcin has been amachine and a saint. There is no way we could have accomplished so much without him. He has educated Selco technicians, explained technology to users, spoke with everyone in Hindi and installed stoves. I am proud of all that we have accomplished in Nashik and Ahmedabad. The amount of work we have done would be impressive if we were in Colorado, and the fact that we were able to accomplish all of this in India is amazing and inspiring.

Chaun

The "C" Words

I went to COLORADO COLLEGE (known far and wide as "CC") last week to talk about entrepreneurship and sustainability. I spoke about the CONVERGENCE of social entrepreneurship and sustainability in the BOP, driven by environmental degradation and poverty. As Jeffrey Sachs has pointed out eloquently, these two go hand in hand. To a BOPreneur, that means you need to address both if you are going to be effective. That is what we are doing with Envirofit.

Anyway, one of the students asked how I had the CONFIDENCE to launch Envirofit. I think this was a polite way of asking "are you CRAZY?" But as with many student questions, it kept coming back, days later. For the record, my answer was that I didn't have a lot of confidence that we could pull it off in the very beginning. But the idea seemed COMPELLING. So we gave it a try. Then it had us.

Well, I kept thinking about it. I even pulled out the dictionary. Interestingly, CONFIDENCE has several meanings. One is "feeling of CERTAINTY". Well, we were certain that there was a problem (urban air pollution from motorcycles is a huge problem in Asia). But we had no feeling of certainty that we would be successful in solving it. Another definition of confidence, however, is "trust in a person or thing". Well, I did have a lot of trust in both the idea, and the people with whom I was starting the business. So, it turns out, I had did have confidence in starting Envirofit, just a different type of confidence. I think that second type of confidence is critical to a start up. If you don't trust the idea or the people, you should move on.

A few other "C" words that might be applicable to the entrepreneurial endeavor might be COURAGE and CURIOUSITY. Courage is an interesting word, with its roots going back to early words for "heart". I think many entrepreneurs are led, in part, by their hearts when they start a business. Those early days are often called a "labor of love." To the extent courage is an approach to the unknown, it fits for entrepreneurs. But to the extent it deals with danger, the word is probably melodramatic when applied to entrepreneurs, and best left to soldiers and spies (although some BOPreneurs have some pretty crazy stories).

CURIOSITY is defined as "a desire to learn, especially about something new." Clearly a driver of entrepreneurship. But it has to be COUPLED with action. It is not enough to learn. You have to do something with the knowledge. Then you will have CREATED something. And if it has value, it will become an enterprise with a life of its own. And that is what entrepreneurship is all about.

News on Stoves and CSU Masters Program

Realize I haven't been a good blogger recently, and that while there may be good reasons, there are no excuses in the bloggosphere.

Good news on two fronts.

First, the Bright Light Stove project is moving forward. I often say that the key ingredients to a start up are an idea, a team and a little money. This was the first project to emerge from the CSU Global Innovation Center that my colleague Bryan Willson and I started with a vision that we could apply the "Envirofit" model to develop other commercially viable solutions for chronic pollution problems in the developing world.

Our idea was an improved cookstove that replaces open fires and stoves with a clean source of cooking, heating and light. Indoor air pollution from cookstoves is one of the largest causes of repiratory disease, miscarriage and infant mortality in the developing world. Close to half the world's population still cooks with traditional methods and biofuels (think "campfire in your kitchen"). Our stove looks much like the old pot bellied stove, with a few differences. It is made largely from sheet steel, the ceramic combustion chamber is smaller and more efficient, and it uses a thermoelectric generator to convert waste heat into electricity, which can be stored in a battery and used later for running a light or small appliance (radio). This project was started by CSU engineering and business students last fall, and they came up with a strong business plan last spring.

Several important action items were identified. Getting primary market research from users and forming local partnerships for manufacturing and distribution. We were very fortunate that the NCIIA provided a start-up grant and that our engineering team won a Mondialogo Engineering prize for the design.

With this encouragement (and money), the student team has been hard at it this fall. Again, good fortune led to a connection with two great organizations in India, SEWA Bank and SELCO. And Vinod, who hosted one of my students in an semester in India, introduced us to Jaynix, a firm in Nashik with metal working expertise run by a family with big hearts. With their assistance, we have developed a primary research approach, where we will install stoves in the households of women microentrepreneurs who are SEWA Bank customers. This Friday, the first of our team leaves for India, and we hope that by next week our stoves will be puffing away in Ahmedabad. I feel very lucky to be working on such a meaningful project with such wonderful people.

The second item of good news is that last night, the university gave final approval to our new graduate masters degree program in Global Social and Sustainable Enterprise. This will be a 3 semester program, with a significant field work component. I believe it is very different from most business degree programs, and will be well suited to those who have made the decision to embark on the journey of creating, building and leading enterprises that are based on solving our global challenges of poverty, pollution and disease. I have been encouraged by the support around the university and from many others in the field. In particular, Ashoka, SocialEdge, and Echoing Green have been helpful in providing some giant shoulders on which to stand. And Jim Collins's work has been reaffirming and helpful as we set our BHAG ("Big Hairy Audacious Goal")for how our institution can do meaningful and relevant work in the future.

Advice to Entrepreneurs about the Sustainability "Space"

Sustainability is hot. Green is the new black. Social entrepreneurship is seen as a way of providing purpose in one's work. I am getting a lot of requests from people for advice on how to get started in the "sustainability business," (caveat: my current view is that this isn't really a business, rather it is an approach to business). Students, recent grads, and people looking to reinvent their careeers smell opportunity, and want to get in on it. But because the area is pretty new, there aren't a lot of "traditional jobs" out there yet. So, you may have to create your own job by starting a business. Here are a few thoughts, based in part on a recent message I sent to some entrepreneurship students.

1) I would encourage you to think (deeply) about what you want to get out of a business. Building a business is a huge amount of work. Don't embark on this effort lightly. Passion is the "fusion power" of human energy- without a lot of it, you are unlikely to make it through the tough patches. Stephen Covey counsels to "Begin with the End in Mind"- good advice. Work backward from the goal.

2) Most times, entrepreneurship is a team effort. Pick your partners carefully. You will likely spend much more time with them than your spouse or significant other. The balance of compatability and creative tension is an elusive one. Who do you want to travel with?

3) Many companies start from answering the question "what sucks?" and then doing something about it. Take your time and do your research. Remember Thomas Edison's advice that invention is "1% inspiration and 99% perspiration"? My experience is that he was being conservative, probably because he didn't want to discourage anyone.

4) Think broadly about for-profit and for-purpose (what others may call "non-profit")* ideas, and how these may take the form of companies, co-ops or non-profit enterprises. Make sure that they are based on a sustainable business model, which basically comes down to delivering something of value and getting paid for it.

5) If you are going to build something great, it has to be designed to last... that is part of the obligation to your employees, customers, investors, suppliers and community- in effect, the business ecosystem. I could be wrong, but I think it will be hard to build a reputation in this space if you have an eye on a quick "liquidity event". This has many implications for the design of your enterprise.

6) Much of building a business is building a network. It is coalescing a team around an idea and then working really hard. It is knowing you don't have it quite right, but you won't know how to fix it until you start moving.

7) Want ideas? Cruise through Inc., Entrepreneur, Success, Business Week, Forbes and Fortune. These cover many traditionally successful start-up businesses. Reconceive them as sustainable companies; reconfigure them. Find spaces that are behind the growing interest in sustainability, in which you have an interest and some experience, if possible. Don't do another Patagonia, Interface or New Belgium, but take those concepts to industries and spaces that need them.

*Thanks to David Saiia at Ithaca College for sharing this term with me.

Election Reflection

So, here is my letter to the editor of Newsweek regarding their election coverage, just in case it doesn't get published.

"I am a boomer and a conservative. However, when I pulled the lever for some Demorcrats and Independents in this past election, I certainly was not signalling my desire to return to the policies of Bush '41 and his "Rescue Squad". It is a mistake to read the results as either a rejection of conservative values (look at the state initiatives and the Democrats that were elected) or a desire to return to the old ideas of Bush '41 or Newt.

Both parties need to come up with a new contract with America- one that sets forth what our role will be in the future. One that recognizes that today's America, and today's World, is very different than even a decade ago. One that emphasizes the core values of freedom, liberty, enterprise and innovation that unite us, rather than the issues that divide us. One that emphasizes leading the world in solving problems, rather than ignoring them or creating new ones. One that walks the talk, instead of saying one thing and doing another. One that plays well with others.

Party leaders would do well to to bring younger people and newer ideas into the conversation, rather than rushing back to the false comfort of the "old hands" you profile in this article. Certainly there is a role for history and wisdom in troubled times, but there is also a need for vision and energy. Leaders look forward... not backward."

So, is it strange that a conservative is also concerned about the environment? That a conservative is also a conservationist? That someone who is concerned about industrial waste is also concerned about government waste? Or the waste of human potential due to poverty, ignorance and disease? (Clue- these are rhetorical questions).

Fundamentally, politics is not about the extremes. Too much time is spent arguing over positions, rather than making progress. (See "Getting to Yes" for more on this). To me, it basically comes down to the fact that liberals have a bit more faith in government, and bit less faith in markets. True conservatives are the opposite. Our system, ideally, allows for the battle of ideas, and the ebb and flow of debate. The best we can hope for is political leaders that do their best to do what they say they will do. Rarely do we see this any more. Instead, we see "conservatives" using government to advance social and international agendas from which our constitution is set up to protect us. And "liberals" pushing tired agendas of large government programs that will collapse from their own weight in time.

The recent Business Week cover story is much closer to getting it right. Government is less relevant by the day. Global economic forces are impacting monetary policy, labor markets, education and innovation. Power is moving, sometimes slowly, sometimes haltingly, but inexorably, to the individual. Richard Florida has said: "The real economic driver of this age is human creativity." Some may wait for government to solve the world's problems. Not me. Those that will harness human creativity and lead our society forward are less likely to be found in government, than in the ranks of activists and entrepreneurs.

My next post will return to BOPreneurs. Thank you for your indulgence of a somewhat tangential post.

Google.org- where are you?

Dear Larry and Sergey:

Google.org made a big splash when it launched a year ago. Three million Google shares, worth almost a billion dollars, and 1% of profits. A new, for-profit model for foundations. It was going to be big, different, pattern changing.

At the time, you said: "We hope that someday this institution will eclipse Google itself in overall world impact by ambitiously applying innovation and significant resources to the largest of the world's problems."

When I first read about it, I was excited. OK, I thought, here they come. The team that says "Don't be evil" is spinning it around to "Do be good" and putting their money behind it. Once again taking a new approach, different than the Gates Gang. Perhaps, I thought, they will figure out a way to launch lots of mini- assaults on poverty, disease and climate change, much as they have done in their core business. Not big program launches, but instead beta-tests, focused incursions, probing for opportunity. Bringing much needed innovation to the social sector. Your first investment, in Acumen Fund, looked promissing. Very cool.

Well, a year later, you have distributed $7 million and given away $33 million in advertising. It's a start, but you aren't even spending the interest, are you? You've hired a very talented person to run it, Dr. Larry Brilliant. You've travelled to see some troubled spots. You have a single web page with a few links. It comes up on the Google blog every once in a while. There have been a few articles in the press about it, but it isn't entering, much less changing, the debate on many important issues. So far, guys, I would say that it is performing well below expectations on the pattern changing front. What is going on behind the veil at Google.org?

The following is unsolicited advice based on rank speculation. I remain optimistic that there is much good afoot behind the curtain, and that you will soon respond to this posting with a flurry of worthy activity.

Suggestion #1- Don't forget the entrepreneurs. You have funded an investment firm and a consulting firm. Please don't fund a law firm next. Fund some entrepreneurs. Want some suggestions? OneWorld Health, some Ashoka fellows, some of the microfinance institutions.

Suggestion #2- Buy a disguise and go to the TechAwards in San Jose later this month. I know you talked to some of the TechAwards folks last year, but you passed on investing in any of them, didn't you. Well, try again. It's a short drive. I know, they are giving Bill an award. But you gotta get over that. Spending time with the 25 laureates is inspiring. I know, why don't you give every one of them $25 k. Steal a little of Bill's thunder. How do you lose? The PR alone would pay for it!

Suggestion #3- Announce your business model. Build some transparency. Until you have a track record, people are guessing about what you want to do. At a venture fund, I can see how they walk their talk. Your sample size is too small so far, so provide some more guidance. Announce some problems you would like to see solved... make sure that your focus is on areas of greatest impact. For instance, with climate change, figure out the interventions that will really matter. You have started with the 100 mpg hybrid.. now how about smart alternative fuels, or off grid power solutions for the BOP. As an entrepreneur in this area, I want to know where you are going to invest. You don't need to even invest yet, just leverage the power of announcing your intentions. Keep pushing the "clean and green" angle.

Suggestion #4- Go to a new space. The war on poverty, pollution and disease is not the "space race." The dominant logic of "big aid projects" is so Globalization 1.0 (as Tom Friedman would say). We know they don't work, and yet we continue to do them. It is fashionable to talk about "scaling," but then revert to these tired old models. Who better to think of scaling than you guys. So...time for some blue ocean thinking ... redefine the boundaries, change the value proposition, as you started to in the beginning. While I won't criticize any specific "big programs" (I will leave that to Easterly) we need other approaches. Figure out how to fund at the frontiers... lots of small, lower risk shots will go a long way. Call it the "Starfish Venture Fund" or something, after Loren Eiseley's well worn fable. Not the venture model, like Accumen, but something with smaller investments and some other type of diligence/risk mitigating strategy. And, remember, the key to many BOP is to go to your customer. This isn't VC... don't emulate the Sand Hill Road model where entrepreneurs troop dutifully to your offices. Emulate Yunus, and go to where the entrepreneurs are. Physically or at least virtually.

Suggestion #5- Use your expertise to then connect these entrepreneurs, plugging them into the network and creating more value. Several of the most popular examples of social enterpreneurship(microfinance, solar electricity, tredle pumps) emerged separately, and the founders didn't have a chance to compare notes. Have a conference, and pay for the entrepreneurs to attend. Don't invite a bunch of bigwigs from the UN and World Bank. Just the entrepreneurs. Let them listen to each other. And you listen to them. But be careful, as soon as it gets big and fancy, you will lose the true entrepreneurs. There is already a WEF, afterall.

Suggestion #6- continue to leverage close connections between Google.org and your core business. Pick initiatives that tie back to information and knowledge. Literacy looks like a winner to me in this regard, so build on your PlanetRead investment. Figure out how to replicate it to other countries. Fund some others in this area. Take a look at the Design that Matters projector and Joshua Silvers' adjustable eyeglasses. The more people that read, the more information they will want, and the more they will turn to Google to get it. Just more clicks, more revenue for Google, and more money flowing to Google.org. A virtuous cycle, for sure. Other areas that might yeild similar results would be more transparent governments aroundthe world... freer citizenry will use Google more, won't they?

OK, that's a start. I am sure you guys have done a lot of brainstorming and planning, but it is time to start doing. There is much to do, and you guys can help.

Do be good, and be great at it.

Best of luck,
Paul

Helping the African Farmer

First, a caveat. I have not been to Africa (yet).

Last night, Dr. Deborah Delmer of Rockefellar Foundation spoke at CSU about "Creating a Road Map for a Green Revolution in Africa," in which she laid out ideas for how to improve food production in Africa. Interesting to me, in that leaders like Deborah have clearly connected agricultural science with economics and business. That improvements in seeds, crop science, etc. need to also take into account downstream issues like markets, export policies, etc. As with our efforts at EnviroFit, it is the merging of appropriate technologies and appropriate business models that will enhance the chance of success.

From this summer's posts, Millenium Villages project is getting good results from this past season, which is very hopeful.

Interested in entrepreneurs working in this space? The guys at Kickstart are the best known, and I encourage you to read about them. And our fellow Colorado group, IDE has also been working on this for years. But this past week I met a new entrepreneur in this space at the Net Impact conference.

Andrew Youn just finished his MBA at Kellog last spring. Rather than join his classmates working with big companies, investment banks or consultancies, Andrew started his own company, the One Acre Fund. This comprehensive program has a systematic focus on eliminating hunger in a sustainable way. Andrew gave me a copy of his business plan, and I am impressed with the person, the idea and the implementation to date. In a few short months, he has the program going, and is working with over 100 families who have small farms. He has designed an organization that has a significant impact, a sustainable business model and is scaleable. He is attracting good talent.

Some highlights of his approach:
-don't give handouts
-provide a solution that is realistic for the extreme poor
-dream big
-remain 100% accountable

Please consider joining me in investing in the One Acre Fund (start by donating at least $20/month online).

Mind the Gap

"Mind the Gap"

... says the loudspeaker at the Heathrow Express Train last week, reminding me not to step into the gap between train and platform.

Well, this post is on a different type of gap. As entrepreneurs, we often deal with gaps, and gap filling, but an article in the NY Times today identifies the gap in research funding to come up with cleaner technologies.

From the article:

"Cheers fit for a revival meeting swept a hotel ballroom as 1,800 entrepreneurs and experts watched a PowerPoint presentation of the most promising technologies for limiting global warming: solar power, wind, ethanol and other farmed fuels, energy-efficient buildings and fuel-sipping cars.

“Houston,” Charles F. Kutscher, chairman of the Solar 2006 conference, concluded in a twist on the line from Apollo 13, “we have a solution.”

Hold the applause. For all the enthusiasm about alternatives to coal and oil, the challenge of limiting emissions of carbon dioxide, which traps heat, will be immense in a world likely to add 2.5 billion people by midcentury, a host of other experts say. Moreover, most of those people will live in countries like China and India, which are just beginning to enjoy an electrified, air-conditioned mobile society.

The challenge is all the more daunting because research into energy technologies by both government and industry has not been rising, but rather falling."

This article refers to today's report from Her Majesty's Treasury (i.e. Tony Blair's administration). I haven't read it all yet, but here is a quote from Mr. Stern, the author:

"What are the costs and benefits of taking action? The costs of removing most of that risk, getting to 550 or below, are around 1% of GDP per year. The cost could be above or below 1% depending on policies, technological progress and ambitions but would be in this region. This is equivalent to paying on average 1% more for what we buy - the price rise for carbon intensive goods would be higher and for low carbon intensive goods would be lower – it is like a one-off increase by 1% in the price level. That is manageable; we can grow and be green."

OK, first, he is talking about getting to 550 ppm of CO2, which is an improvement over "Business as Usual" and, in their estimates, puts the earth in the position to have a 50:50 chance that global average temparature increases over the next century will be less than 3 degrees C above pre-industrial levels. We are currently at 430 ppm and if Business continues "as usual" then we could hit levels that give a 50:50 chance of over 5 degrees C. In the 550 ppm scenario, CO2 concentrations would peak in 15-20 years at that level, and then begin to fall.

Second, it is always wise to be wary of percentages, and mindful of where the money is supposed to originate. So, he says 1% manageable... but it is serious money. The world GDP these days is about $60 trillion (US is about $12 trillion). So 1% is $600 billion a year. That is twice the size of Wal-mart, and about the same size as the entire Australian economy. As Senator Dirksen supposedly said "A billion here, a billion there, and pretty soon you're talking real money. " The NY Times quotes John Holdren of Harvard as saying the US has a $12 trillion capital investment in then next 20-30 years. That, my friends, is real money.

Back to my original theme, now, of "minding the gap." So it is going to take $600 billion of investment/year to hit this target. How are we doing now? Well, the NY Times article says US is currently at $3 billion in federally funded research. If you take the 1% level for USA, it would be a $120 billion/year target. That looks like a pretty major gap we need to mind. The NY Times (remember who we are dealing with here) is not optimistic that private industry or entrepreneurs will solve the problem, although it lays out where some of the gains may be achieved (conservation, solar, etc.). The gist of the article is that we need a bold national program (and implicitly new leaders) to make this happen. Think the Space Program.

Maybe. I am not so sure. The big bold program certainly has emotional appeal (and is of course another way to avoid any real individual initiative or action). Just as I have articulated my concerns with Sachs's big plan to end poverty, I am also concerned about "big programs" here. What I think we need is lots of experimentation. Getting rid of perverse subsidies when they protect out moded and harmful industries. Encouraging conservation. Encouraging ordinary people to take action and giving them incentives to do the things that will have the most impact. Lots of innovation in markets around the world. If there is the political will to increase federal research on clean technologies, great. But lets not sit around waiting for the government to solve this.

Big programs tend to get run by governments. Sorry, I am skeptical. This is not a space race and we aren't trying to beat the Soviets. The enemies of our world are poverty, disease and pollution. "Think globally, act locally" is not a mantra for the big program. Progressive government policies are needed to modernize legal rules to reflect desired market outcomes (emissions trading, "take back" laws, health insurance coverage). Then government's job is to stay out of the way. I'd still rather have many bands of entrerpreneurs working on this than a big policy team lead by Al Gore. But if Al wants to invest in a clean tech venture fund or contribute to a microfinance institution, that's great. Maybe this too is an "inconvenient truth"... that we can't rely on government to mind the gap. We all must mind the gap, and apply our multiple skills, passions and assets to fill it.

Addendum 11/16: Paul Graham (of whom I am a big fan) recently posted an essay of the same title on his site. It is on a different "gap", but it is, as always, an interesting and provocative essay.

More on Entrepreneurial Education

In the interest of equal time, those interested in the debate over whether entrepreneurs are "born" that way (my post of Sept 23) ... Inc magazine has an article on a recent study. An interesting perspective on how this matters for entrepreneurship education. Here's a quote:

"The survey results indicate a major issue in academia today: institutions of higher education are not adequately preparing students for careers in entrepreneurship," Paul Zavracky, dean of School of Technological Entrepreneurship, said in a statement. "While entrepreneurship skills can be taught, the survey results suggest that the desire to be an entrepreneur usually is not." See Are Enterepreneurs Born or Made

Read the article... see what you think. I hope that when students take my class, they learn more about entrepreneurship. As a result, some may have their entrepreneurial instincts validated and sharpened, and others may become newly inspired to become entrepreneurs.

Is Solar PV Affordable Yet?

Today, Harish Hande, the founder of SELCO visited our lab and gave a lunchtime presentation at the CSU business school. I met Harish last fall at the TechAwards and was impressed by his comments on the power of light as a tool for poverty alleviation. We visited again in July when I was in India, and I was further impressed by his activites. No doubt, Harish is a BOPreneur.

SELCO is a for profit company. It sells household photovoltaic solar electric systems to those that make $1-3 per day. Yup, read that last sentence again. When asked, Harish said that the company was formed to dispel myths, one of which is that solar electricity is unaffordable. These solar PV systems replace kerosene lamps; a dirty technology is replaced with a clean technology, and at a lower cost!

How does he do this? We keep being told how expensive solar PV is, compared to other energy sources. Since this is India, the trick must be that they exploit cheap labor and manufacture cheap, low quality, PV systems, right? Not at all; in fact, solar pv panels are more expensive in rural India than in Europe. And they purchase the same panels used by the market leaders, but at lower quantities and sizes. So no economies of scale advantage either. And he offers his customers full warranties and 24/7 on site service.

Instead, Harish looked at changing several business processes to make his systems affordable to the poor. He learned an important financial lesson from a street vendor who told him "300 rupees a month is way too much money, but 10 rupees a day is very affordable.". So he established microfinance plans with the rural development banks that made his systems affordable.

In addition, part of the service he provides is that of a business and energy consultant for his clients; but these are not MBAs or McKinsey alums. His average technician is from the community and dropped out of school after 5th grade. Yet they often come up with creative ways that the economic benefits of their electrical power will exceed the cost to the client.

What type of system does SELCO provide? Usually a small system that powers 2-4 lightbulbs (7-10 watts each). The technicians work with the clients to evaluate their needs, and they often figure out how to sell a lower powered system- meeting the client's needs, but at a lower cost. In addition, microentrepreneurs have started to use the systems to charge several batteries, which they then rent to shops for the evening hours of operation.

SELCO has installed 65,000 solar PV systems in India, for basketweavers, midwives, clinics and churches. Harish is now working to expand his business by making it a "one stop energy shop" for the rural poor in India.

A lesson for aspiring BOPreneurs: if someone tells you that a technology is too expensive for the poor, remember SELCO, and make sure you check to see if you can redesign the processes to make it affordable. You may also find a sizeable, profitable market opportunity!

AASHE- The Role of Higher Ed in Creating A Sustainable World

So, I am in Tempe, attending a conference on sustainability in what must be one of the least sustainable places on the planet. But I have made peace with this sustainabilty paradox. This has been a really good conference; and it is the "first", so maybe in a few years we can all be talking about it, and selling the organic cotton T-shirts on Ebay.

So, here are a few impressions of a diverse and excellent group of keynote speakers:

Lead off speaker- Bill McKibben. Quote: "Climate change is the defining issue of our time." OK, so I was coming from another meeting on infectious diseases, plagues and flu pandemics which was, actually, pretty optimistic about our chances for figuring out these problems. Bill's message is kind of gloomy (while not over in the "doomy" camp, yet, he's definitely moving in that direction). Citing NASA's Dr. Hansen, he is concerned that we may have less than 10 years to address climate change, or perhaps it is already too late. Maybe we have already hit some trigger points and and climate change will accelerate rapidly. Bill is a passionate speaker and talented writer, but little bells were going off in my head. After his dire warnings of rapid sea level rises of 60 feet, more earthquakes in Greenland, methane bubbles inSiberian swamps and thawing artic tundra, he concluded that we "have ten years to reorganize the economy of the planet".

Hmmm. I always like to observe whether those crying "fire" are running to get a bucket of water, or just yelling. As with Al Gore's movie, there seems to be an urgent call to action, but then not a lot of details about what we should do about it. Vote. Write a politician. Buy a hybrid. McKibben's personal actions seem to involve giving speeches, writing a lot of articles and books (and he is an excellent writer) and organizing a "sustainable journalism' club at Middlebury. They are working on implementing some cogen facilities and getting the students to turn the heat down to 68 degrees. Don't get me wrong, that is fine. It's all good work! He is a passionate speaker and he is spreading the word. And he is using his talents to catalyze change. But his personal actions imply that we probably have a bit more time than a decade to do something. I don't see the radical actions that so dire a predicament might require. I mean, if you really believe the world is going to end in 2015, what would you do?

So, props for the passion and story telling. But disappointing on several points. First, sustainability is not just climate change. There are legitimate arguments that other challenges are equally worthy of time and resources- poverty alleviation, disease, water pollution, oceans- I fear that these are being lost to many of the conference attendees. Second, I really question the use of fear as a motivator. It doesn't do much for me. It's a personal thing, but I prefer hope. It seems to be, well... more sustainable. Perhaps that is another dissimilarity between activists and entrepreneurs that we will need to work through together.

Next up: Ray Anderson. Quote: "Today's third graders will be college grads in 2020- what must they have learned to work for Interface?" While I was a bit disappointed with McKibben, I was really impressed with Anderson. He gave a great talk about his journey to becoming a true leader in sustainability. Humble, a southern gentleman, still in learning mode at age 72. Bill McKibben writes about it; Ray Anderson gets it done. He tells us "Educators have an awesome role of responsibility- do we want to teach our students how to make the next PCB? or how to practice petrochemically based agriculture?" Great examples of getting engineers and business people to rethink the way they work. An optimist, an activist in a dark gray suit, a leader of a company and a movement. Inspired by Hawken's book- Ecology of Commerce when he was 60- look at all he's done in 12 years. If I am in a battle for the future of the planet, I'd like a bunch of Rays on my side! Definitely deserved the standing ovation.

Interlude: cool students abound at this conference. Check out Mark Orlowski of Sustainable Endowment Institute, Billy Parish at Energy Action Coalition, Leti McNeil at Engineers for a Sustainable World, and Brandon Armstrong at the Southern Alliance for Clean Energy. Passionate, articulate, thoughtful, persistent... maybe our next Ray Anderson, Oprah or Bill Gates.

Next up: Beverly Wright. Quote: (oops, didn't take notes on this one... it was late). An interesting speaker on a topic that didn't get enough attention at this conference. The close ties between environmental degradation and poverty. The social aspects of sustainability. Society can't just aspire to be green, it must aspire to be just. Her work pre- and post- Katrina was inspiring.

And last, but not least, Hunter Lovins. Quote: "Hypocrisy is the first step toward real change."(discussing Wal-Mart's green initiatives). OK, this is the crack cowgirl of sustainability. Sincere, passionate, smart, funny as hell, frenetic and inspiring. She probably gets more done in a day than I do in a month. (And, in case she ever reads this, I am not bitter that her session earlier in the day was the same time as ours- it just made ours a more "intimate" workshop). Hunter is a systems thinker...drawing connections from disparate sources. She had a very well rehearsed, humorous and thoughtful presentation. A message of hope, innovation and belief that natural capitalism is the right path. I also liked the questions from the students that called Hunter out on a few topics: what about the social aspects of Wal-Mart's operations? Aren't the corporations the low hanging fruit- what about individuals? And, the best question of the conference as far as I'm concerned: "So, what does the sustainable future you envision look like?" Hunter couldn't answer that one, and I get the sense she is rarely at a loss for words. It is a very provocative question.

I will leave you with another impactful moment, and it also didn't come from any of the big name speakers. It came from Kai, in dreadlocks and a Seuss Lorax shirt, who shuffled up to the mike at the end of a session on university initiatives on "sustainability" (that had again focused heavily on climate change). "What about war- Isn't that a threat too?" he asks. "Good Question" says the speaker (they always say that here) but doesn't really answer (and the speaker was a boomer who presumably remembers something, dimly, about another war). I would urge sustainability folk to remember that there are 3 legs to the sustainability stool. They need roughly proportional attention. At this conference, environment and economy got the focus. The social leg came up short. Kai brought that home with his question.

There was much more. I took a whole pad of notes in various break out sessions. But, just like those old rock concerts, "you had to be there."

Kudos to the AASHE organizers and ASU for pulling this off. It was informative, fun, and energizing. I look forward to next year and seeing how much progress has been made.

Nails and Fat Tires

No... not nails and flat tires, but fat tires. This week was great, and much better than last year at this time!

First, our College of Business faculty uananimously approved the curriculum for a new masters program in Global Social and Sustainable Enterprise. This was a key step for our program and, more importantly, it was a great way to start working with a broader team in this area.

Now about those nails... on Tuesday, we were very fortunate to have Hernando DeSoto visit campus and give a talk about the role of private enterprise in alleviating poverty, as one of the kick-off activities for our program. He gave a wonderful talk to a full house at CSU. One of the interesting anecdotes he told was that Thomas Jefferson used to be proud of being a "nailmaker". Seems pretty mundane for a guy who was a founding father of our nation (and the University of Virginia) and a president (he was also a slaveowner, and it seems the slaves were really the nailmakers). But DeSoto said that in those days, nails were quite hard to make, and very valuable. So valuable, that when someone moved, they often burned down their house to recover the nails. So why was he talking about nails? Well, these nails represent what holds the house together, and DeSoto was talking about what holds a society together. For him, these "nails" include economic and legal freedoms, including private property rights and the ability to form business organizations. These "nails" may not be as obvious as the lumber and windows and roof... but without them, the house will not stand up over time. Much of DeSoto's work is devoted to figuring out what the important nails are, and then helping build stronger societies in the poverty stricken areas of the world.

Now DeSoto didn't mention that Jefferson was also a brewer, and that gets me to beer... which gets me to Fat Tire. In Fort Collins, we are lucky to be the home of New Belgium Brewing, which makes great beer (including Fat Tire), throws great events (Tour de Fat), and is one of the more progressive companies out there (the first wind powered brewery). Recently, I was asked to join their board, and last week I attended my first board meeting. I was impressed by the quality of the team as well as their business processes and systems. I think we will be seeing a lot more cool things come out of this company... and yes, we did sample the product at the end of the meeting.

And while I am on fat tires, I have to say the mountain biking (the sport that inspired the eponymous beer) in Fort Collins has been awesome recently. The weather has cooled a bit, the trees are bright yellow, and the trails are in great shape. Kudos to all the new trails we are getting open- Blue Sky is terrific, Shoreline has been rerouted, and Bobcat Ridge just opened 4 miles last weekend (with another 6 to come in the spring). There are very few cities with such great riding "right out of town" and our tribe should be very pleased with the results.

Lastly, I pause to give thanks. A year ago, my son was riding his bike back into Crested Butte, after finishing a century ride on a beautiful fall day. Another young man was not having such a good day, had too much to drink, got in his SUV, and hit my son from behind at over 60 mph. Luckily, Peter lived, but he was dinged up pretty bad, and spent the winter in our basement, instead of playing in winter's powder. I am not sure his ankle will ever recover, but his mind and attitude have definitely bounced back. In a few weeks, he heads back to Alta, and I hope they have an epic winter to make up for the one he missed. I am looking forward to his videos on UTube.

Are Entrepreneurs born that way?

A recurring assertion is that Entrepreneurs are born... the implication is: "if you don't have the DNA, you really shouldn't even try." It is a variation on the "nature" or "nurture" argument, that has been applied to genius, homosexuality, addiction and many other traits that make people special, unique or different (depending on your perspective). I find this all too deterministic, and inconsistent with the idea of personal freedom. I have not doubt that people are wired differently and grow up differently... but I don't think this determines what they will do or how well they will do it. And I think that part of the fun of life is trying different things and finding out what you are the best at. I'd hate to have that rely on a genetic test I took when I was a kid.

Recently, Brooks Mitchell, who is indeed an entrepreneur and a fun guy, made this argument in the Northern Colorado Business Journal. Brooks proudly asserts that some Johns Hopkins scientists had even discovered an "entrepreneurial" gene. The implication was that he had it, and was damn happy to be one of the special few (roughly 15% have it, I guess).

A recent article in the Stanford Social Innovation Review by Paul Light (who I don't know, so I am not sure if he is an entrepreneur or a fun guy) indicated his concern with a variation of this thought pattern in the area of Social Entrepreneurship. While I don't know Paul, he seems like a thoughtful guy, and he has done a lot of research on social entrepreneurs. He asked, in effect, if we aren't setting the bar too high to only look for these high energy "changemakers" (a not so veiled reference to Bill Drayton's approach at Ashoka).

Ashoka screens its entrepreneurs based on their track record, looking for clues of entrepreneurial spark at a young age. I am not sure if they think it is in the genes, but they certainly seem to believe that "nurture" plays a role. I don't know Bill Drayton either, but he too strikes me as a very bright guy, and he has an excellent track record of choosing these Changemakers and supporting them personally.

As far as I know, Ashoka doesn't do a "genetic test"- they instead look at a person's history, starting when they are young. And, I think they understand that the passionate changemaker isn't enough to change the world... part of what they try to do is put that person into a network so they can pick up that "synergy/energy" from others. The "changemaker" is the start... not the end. In effect, the spark that may start a wildfire of change. So, I think they have the business model for supporting these individual changemakers down.

But is that it? I can't believe (and I doubt that Ashoka believes) that this is it- there are only several hundred changemakers in the world. Their model achieves impact, and a strong and growing network (see below). There is more. I know (and work with) changemakers that are not Ashoka fellows. I expect innovation to spring from teams and networks, who have observed these individual social entrepreneurs and build on their success. Already, the replication of solar panels, microfinance, cell phones and human powered irrigation technologies/business models is in evidence in BOP markets. "Fast follower" may not just be a strategy of the traditional entrepreneur, but the social one as well.

My view is that while it may sell some Money magazines, the solo entrepreneur is an American myth. Think about it, was it just David Packard or Bill Gates or Steve Jobs? ... No they had partners and teams in the early days. The "solo" entrepreneur just doesn't synch with my experience. As an entrepreneur and an investor, I am always looking at the team. Sure it may have the visionary leader, but often there is this cool synergy between the founders. The energy of the group exceeds the individuals. While solo entrepreneurs may exist, I think they are vastly outnumbered by entrepreneurial teams, both in traditional entrepreneurial ventures and in the social sector.

Peter Drucker and Amar Bhide are some of the seminal thinkers on innovation and entrepreneurship. Just because they did their work several years ago doesn't mean it isn't relevant to this discussion. Both emphasize that innovation and entrepreneurship are hard work and hustle. The invention/idea isn't enough. It is the getting it out the door... hiring employees, getting investors, negotiating with vendors and distributors. It is getting others to "buy in" (or as we sometimes morbidly say "drink the Kool-aid"). Sorry, but hard work and "playing well with others" is not genetic. Neither is the incredible persistence I see in successful entrepreneurs.

The value equation of the network business model, where additional customers/participants add value geometrically, applies as well to social entrepreneurs. It is still a pretty small group of changemakers out there (particularly when you think about all the change that is needed!). No need to do "genetic testing" or exclude people because their childhood lemonade stand didn't do an IPO. Nope, what we need to do is provide support, encouragement, role models and education to those who want to make a difference. They then need to make the choice to pursue their passion with persistence. Entrepreneurship, in the end, is a choice... and a difficult one.

Dr. Mitchell can do a genetic test on the leaders of the companies he starts or funds. But not me. I am going to talk to them, talk to their network, observe what they do, see how they respond to assistance, how they interact with others, and see how they build value with the resources they have. I want to see what choices they make as they strive for major changes in markets or society. And I will still make mistakes. But a few are going to have a big impact... that is what keeps me going.

Entrepreneurs, Artists and Students

Intriguing conversation in the past few days with a colleague on creativity and entrepreneurship. Creativity is definitely a part of the entrepreneurial equation, but I haven't found it to be the solitary type of creativity I associate with the artistic process. Instead it is a social process of creation... brainstorming, reading, interacting, reflecting, talking with friends... a combination of individual and group effort.

In business schools we often ask students to do team exercises, such as writing business plans. In most cases, students are thrown together early in the semester, figure out a project idea and do the assignment. My experience is that this happens in the corporate world as well, in the marketing departments, or new product development departments of the less innovative companies. An idea gets some traction, and usually people are "assigned" to work on the project.

That is so different from what I see in the true entrepreneurial venture. Here the combination of the inventor and the idea exert a magnetism... others start to help. Some are attracted, some repulsed. Bonds of trust exist from previous ventures, or start to form anew. The idea and the team begin to take shape. From this cloud of energy, things that matter begin to condense.

Jim Collins observes that Great Companies practice "First Who, Then What" when starting initiatives. Yet in these classes, where we often discuss this concept, we do not truly take this advice to heart. In entrepreneurial ventures, the Who and the What are more tightly bound, I think. The Who can't imagine not doing the What, and the What disappears without that Who (or group of Who) driving it. (out of context, that is a fairly Seussian sentence, isn't it?)

How do we replicate this for students? In some cases, I have students that have ideas, and come to my class planning to develop these ideas into businesses. Some successfully pull together a team and move forward, and these are often the best projects. Probably because that Who has been thinking a lot about What, cares more about it, and screens prospective team members because they care about it. It isn't just an assignment for them. Others "give up" (rightly or wrongly) and join another team. The Who or the What is too weak to survive in this exercise. Sometimes, the student keeps working, outside of class, refining the What... perhaps to emerge again, down the road.

The basic point is not to confuse the social creativity that leads to entrepreneurship with the more solitary creativity that leads to great sonatas, painting, or novels. And, that Entrepreneurship Classes should not be confused with entrepreneurship. A class can inform a student about the entrepreneurial process, and give them the practice of pulling together all the pieces of planning an exercise, just as an art student can draw Michelangelo's sculptures or copy Cezanne's landscapes. But it is only when the student takes off from that experience, that they are creating. It is only when they start the business that they are becoming entrepreneurs.

Rewiring Rwanda

Here is an account of Greg Wyler's efforts to provide lower cost internet service in Rwanda from the WSJ.

This article contains many of the hurdles that BOPreneurs face. It appears that Mr. Wyler's efforts are showing signs of success: much faster connections at much lower costs.

Losing Our Edge(s) in Innovation

I am working with a new group called Opportunities Without Borders. It is a great group of people, with a great idea. I hope it will bring an innovative solution to helping increase entrepreneurial ventures between countries. Our website will be up soon, and you can find out more. www.owob.org

When we were picking a name, one thing we discussed was that there were a lot of "without borders" groups out there. Some are pretty funny (Beer without Borders), some are well known (Doctors without Borders, Engineers without Borders). To us, the name connotes helping others without regard to the national, racial, economic borders that so often cause conflict.

As an entrepreneur and traveller, though, I love borders. Well, frontiers really (Doctors without Borders, the Nobel prize winner, is actually a french organization, Medicins sans Frontieres, and has a nice double entendre). I like to see what is going on at the edges. I like to see the differences as one crosses borders. The interesting stuff goes on at the edges... of nations, ecosystems, organisims, cells.

Sometimes the scary stuff too, like the current Israel/Lebanon conflict. A lot of energy goes into creating and maintaining these frontiers. And when they change,entrepreneurial opportunity is often created.

My concern is that America is trying to suppress movements at our frontiers, and that this will have the unintended consequence of dramatically reducing our capacity for innovation. [To be clear: I believe America's most important source of competitive advantage is our culture of innovation. I also believe that it is largely taken for granted, and not well understood, by our society and our politicians.]

Some examples: Immigration (our physical border- and not just the laborers, but the knowldege workers who used to flock to our universities, and then stay here and build ideas, companies and capacity to innovate), Stem Cells (frontier of scientific knowledge and discovery), Kyoto (frontiers galore on this one)... these are all areas where our current policies involve a refusal to understand that banning something in today's global society doesn't mean it won't happen, it just means it won't involve as much American influence or innovation. Is that a good thing- that our nation will have less involvement in solving tomorrow's problems?

I saw an interesting slide yesterday on the "homoginization" of species with globalization. Non-natives are spreading around the world rapidly, resulting in pressure on, and sometimes extinction of, the natives. We are talking about plants and animals here, but since I am just finishing the book Collapse, the human analogy is striking. Will this globalization lead to a homogenous world, with little diversity and fewer of the "borders" that keep it interesting?

Thomas Friedman and Juan Enriquez have written some great stuff on the declining value of nations (and corporations) and increasing value of the knowledgeable individual as society continues to globalize. What happens to innovation in this "world without borders"? Well, they are still there, but they shift from the physical to the virtual. Ideas are like the DNA in those invading species... trying to replicate, exploit new spaces, cross borders into new territories. How do we preserve the diversity of species, the diversity of ideas, the diversity of cultures that contribute to increasing the number of frontiers? That drive innovation by connecting diversity, not to eliminate it, but to enhance it?

As a conservative (in the sense that I lack faith in government solutions, not that I believe it is unpatriotic to question Bush policies), I find it troubling that the Administration continues to erect barriers to innovation, as opposed to working on policies that celebrate the power of our innovative culture and support it. Policies that encourage us to push the frontiers of knowledge, not try to retreat to a time when we knew less.

Failure to act when you are aware of a threat is no longer ignorance, it is negligence or recklessness. Failure to be fully engaging the most innovative country in the world in key areas of need, such as medicine and climate change is reckless... and sad. It is a sign of a country that has grown soft and seems to have forgotten that courage and leadership can be manifested in many ways other than military force.

Getting a Hat from Noriega

So to revisit the NPR theme, there was an interesting "This American Life" program I heard last night about a young woman (Sara York) from the Michigan Upper Penninsula (yup, da UP) that became a penpal with Panama's infamous leader. OK, so I am not going to focus on the underlying theme that she was probably being used by this guy, nor the idea that a thug may have a soft side.

Instead, what I found interesting is that this is a great example of how ACTION is a precondition to getting things started, often of surprising magnitude. It is a human example of those "butterfly wings starting storms". It is also a great example of an old negotiation addage: "You don't get what you don't ask for."

The gist of the story is that young Sara was watching TV and saw General Noriega. He had on a hat she admired, and that she thought her dad might like a hat like that; and she wanted to know more about Panama. Her dad, at first jokingly, said, "write him a letter".... so she did. This started a pen pal correspondence with Noriega, that eventually turned into a trip for this young girl and her mother to Panama. And, he sent her the hat, too.

As social entrepreneurs, we are often in need of "hats" from people that we don't know, and who may seem unapproachable. I am not talking about asking them for money, necessarily, but rather access to ideas, people, networks, a piece of equipment, a little of their time. I think we would all do well to keep Sara's story in mind. It's pretty simple, and proved very effective.

Why did it work? My thoughts:
1) Sara was non-judgemental... she and her parents were well aware of Noriega's reputation. But she didn't dwell on that- she was young, and perhaps a bit naive, but that may be why Noriega opened up to her. My observation is that one difference between social activists and social entrepreneurs is that the latter are at least willing to listen, and then perhaps deal, with those of a different stripe. This sometimes leads to better understanding and forward progress, in short, value creation for both parties.

2) Sara established a relationship. She didn't just say "please send me a hat". If she analyzed it, she could probably have figured out that the General could easily just afford to send her a hat. But she also wanted to find out more about his country, referring to what she was seeing on TV. This led to a number of letters over a period of time. In time, she received many things of greater value than the hat itself.

3) Sara took ACTION. She wrote the letter and stuck it in the mail: "General Noriega, Panama City, Panama." She didn't really expect to hear back, but she did it. That started the chain of events.

I know someone who heard of a movie star's interest in biodiversity, and found out he had a place in Colorado, and decided to go visit him without an appointment. Wow! A colleague asked for a very expensive piece of equipment that could help us better produce low cost cookstoves... the company said "yes" right away.

So whose hat would look good on you? Have you taken ACTION?

Oh, and if you are asked for a hat... look at as an opportunity for engagement. Maybe your hat can really help out someone who needs it more than you!

Where Should Buffet and Gates Invest?

So...how would you change the world? The Social Edge forum has been debating whether Warren Buffet's contribution is a good thing (or at least trying... sometimes these forums get SO off topic!).

The basic question, not just for the Bill and Melinda Gates Foundation ("B&MGF"), but for all interested in large scale social change (and complaining about there not being enough money) is: Given all the world's challenges, where will you invest your time-talent-treasure to make a change?

We all have different issues and passions and there are lots of places where we can make an impact. It is interesting that so many seem to come to this discussion with a "scarcity" mindset, since we are basically talking about human energy and passion. Isn't this a limitless and renewable resource? Money follows great ideas + effective people. I think there may be more money than there are good ideas on how to spend it responsibly. The non-profit and government sector's track record is, to say the least, not spectacular. So where should Gates/Buffet spend their billions? Well, most likely it will be trying to support great ideas and effective people. But where should they start (and where should each of us start)?

To take a popular example these days, what with Al Gore's movie and all... if you assume that climate change will contribute to "catastrophic" events and you have a $60 billion foundation, what do you do? Subsidize hybrids in China, buy carbon credits, promote reforestation or more active carbon sequestration? What is the probablility of success and scale of impact vs. the cost?

While I think climate change is an important challenge, it is a challenge on the minds of those of us lucky enough to live in places like U.S. and Europe (and incidently, we have massive carbon footprints compared to those in the developing world). Should B&MGF spend their money trying to convince us to behave better, or should they focus on immunizing the poor and developing new vaccines against diseases like malaria (which has a huge impact on keeping the poor in poor health throughout the tropics)? or clean water supplies? or alternative energy (as was suggested by a recent interview with Gates in Newsweek), or broadening their educational inititives? As someone I respect often says "it is all good work". If they choose one of these areas, why are so many ready to say it is the "wrong" choice?

To date, B&MGF has spent more time on infectious disease and education (mostly in the U.S.) and they are learning, building networks and making progress- in short, becoming effective. Should they add an additional focus, as suggested in these discussion board threads... agriculture, poverty alleviation, climate change? Or should they redouble their efforts? This decision may well rest on their analysis of whether there are enough great ideas and effective people in their existing areas of focus. And perhaps, this new money will help attract more talent to these sectors.

A final thought- while Bill and Warren have billions, their overall impact pales in comparison to the work of the millions of people that are out there contributing their more limited financial resources, hearts and minds, to whatever cause they support. Let's all keep up the good work and see how Mr. Buffet's gift impacts what we are doing.

They Just Don't Get It

From today's online NY Times:
"The world leaders at a Group of 8 summit meeting on Sunday issued a communiqué on energy policy that touched lightly on alternatives to fossil fuels, like biomass and wind power, but focused mostly on how to bring more oil to the market. "

Einstein's quote is applicable: "No problem can be solved from the same level of consciousness that created it."

Well, if you are reading this blog, you probably know my low opinion of the ability of a government to solve problems (and it is compounded by the plural- governments). Suspicions confirmed. The leaders of the free world aren't going to get us off oil. While Mr. Bush (perhaps demonstrating his earlier experiences with other substances) took the first step of admitting we are "addicted" to oil, it is clear that our governments are not ready to take any of the harder next steps to rehab.

So, it is up to us to take an inventory of our individual actions, take responsibility for our lifestyles and make decisions accordingly. Our governments aren't going to take care of it. Anyone surprised?

If you want to reduce your energy use, or carbon footprint, here are some ideas:
1) Reduce your energy use: some ideas from the EPA, National Academy of Sciences, or Al Gore.
2) Offset your carbon emissions: a list of carbon offset services
3) Buy organic or "green products" from "green companies"

Your energy usage is driven, in large part by where you live (type of home and location relative to work/errands), mode of transportation, and what you eat. If you decide you want to reduce your energy usage/eco footprint, be sensible about attacking the low hanging fruit first. What are the easy changes? Then focus on the "big impact" items that can reduce your $$ spent on energy. As with exercise or diet, setting unrealistic goals increases the chance that you and your family will "drop out". Better to set reasonable goals and achieve them!

Good luck!

There are a number of blogs on this topic- find one that suits your disposition and keep informed.

First Visit to India

Just returned from my first trip to India. Trying to let the impressions percolate... friendly people, lots of rain, lots of work to do. Primary purpose was to visit with potential partner universities for our sustainable enterprise graduate program. Secondary purpose was to do some market research on our cookstove prototype and potential partners for Indian market.
A few impressions/thoughts below:

#1- visiting a small rural village- pretty much everyone interested in alternative energy, microfinance, entrepreneurship. A testament to the hard work of Vinod and Camilla, and evidence that entrepreneurship, microfinance and private enterprise can make an important difference for a village. For more info: http://belgaondhagaproject.blogspot.com/ and www.ecselance.org

#2- the incredibly friendly and fun folks at TLC in Nasik. Second generation entrepreneurs... the rising tide. Hungry for success and impact.

#3- the SEWA Bank in Ahmedabad. Inspiring crew!

#4- ran into Amory Lovins of Rocky Mountain Institute on the plane back to Colorado. He had some good ideas on integration of cooking/pots into stove design.

#5- visiting well known business school- very early interest in alternative energy, microfinance, entrepreneurship. I need to think about this. Is this lack of info, or lack of interest, or just the overwhelming "other opportunities" these students face?

#6- the cows. Pretty much everywhere. From prior travel, I expected the crowding, the slums, the one-eared dogs, but not the cows wandering around a city of millions.

#7- did I mention the rain? and that Mumbai, despite having had monsoons for many years, does not deal very well with the rain? Neither do the cows.

#8- despite a huge number of slums and squatters in Mumbai, the city does not seem dangerous, but instead reserved. People are friendly, get about their business, reasonably patient, but crazy drivers. Compared to other megacities I have been (Rio, San Paulo, Manila) the poverty is more mixed in, rather than segregated into neighborhoods.

Enough for now. I was impressed, and expect to return later this year to follow up on the good relationships we started.

EPILOG- The recent bombings on the trains in Mumbai... my thoughts are with the many affected by these tragic events.

This I Believe

I kind of like the "This I believe" program on NPR. I certainly haven't heard all of them, as it is summer and I am trying to commute on my bike as much as possible.

Anyway, at least with respect to the topic of this blog (focus, here), this is what I believe:

I believe that entrepreneurial approaches are needed to help solve the global challenges we face, particularly in the developing world.

I believe that private enterprise, practiced by ethical people, will be the most powerful, and positive, force of change in this century.

I believe that those that "do" can also "teach". In fact, I believe that those that "do" should feel a strong obligation to teach others... there are many ways to teach, and it is so important.

Not sure this would make the NPR cut, but hey, this is my blog.

What a great surprise today! I subscribe to the Stanford Social Innovation Review and was scrolling through the new issue that came out today. One of the articles caught my eye- "Creating Social Change- 10 Innovative Technologies"... I clicked and started reading... Yikes,... our company, Envirofit International, was one of the 10. What an honor- we are really inspired by being in the mix with all these other great organizations.

It is great to get this type of recognition and rewarding for our whole team. So, we're going to go celebrate at Coops, then get back to work. And, while Coops is not our official sponsor... we wish they were.

Bainbridge Graduate Institute

"Changing Business for Good" is the motto of Bainbridge Graduate Institute. One of its founders, Gifford Pinchot, recently invited me up to see BGI in action. What a cool place!

First of all, its location at Islandwood on Bainbridge Island just fits so well. They time-share with the local schools, and take over this facitily for long weekends. Green buildings tucked in the forest.

Second, the community is terrific as well. The students are there to learn, and they are a diverse and interesting bunch. Seeing them interact over the weekend was inspiring... creative, passionate, dedicated to making the world a sustainable place. For those who have built organizations, this one is special and reflects well on all those that have been involved in building BGI. I felt very welcome as a "newcomer" and had great conversations with many students.

Third, the curriculum is ground breaking. I teach a class on Social Entrepreneurship and Sustainable Business, and am in the process of designing a graduate program for the Colorado State Business School in this area. It was great to see a functioning program that emphasizes the "triple bottom line" and see the student presentations applying these concepts. Many of the projects were for companies (e.g., REI, Chaco Sandals) that had sought out advice from these students.

So, I am a big fan and recommend this program to those who believe that business can be a powerful force for positive change. For another take on this program, see the recent article in the Chronicle of Higher Education. Personally... I didn't hear even one chorus of Kumbaya while I was there, although they throw a great end of the year campfire/roast!

I like Seth Godin's concept of the "purple cow" of market differentiation. To me, differentiation is not just about being different, but being "clearly better" for some market segment. BGI lives up to its motto, and for some, is clearly better than a traditional (and not so differentiated anymore) MBA program.

The Mystery of Capital

Hernando De Soto's landmark book, The Mystery of Capital, identified a key reason for economic problems in the developing world: that much economic activity had moved to extralegal sectors due to high government regulation. Thus, while the poor had assets, they did not have capital, in that their assets could not be used for collateral, or sold in legally enforceable transactions. DeSoto's prescription was for governments to adopt private property systems, where the poor's assets could be titled.

But a relatively new financial system is emerging that may help with this issue; microfinance or microcredit. Under this system, the poor are extended credit based on trust, or "social capital" rather than collateral, or "financial capital". Leaders in the area are Grammen Bank, Accion, Opportunity International and SKS. If you are interested, a great place to start reading is a recent series of articles in the Economist. Or read one of the books about the founder of Grameen, Muhammad Yunus. It is encouraging to see unsubsidized microfinance lenders emerging in several markets, as early entrepreneurs are improving the business model.

My view is that microfinance is already providing access to early stage credit that is needed for entrepreneurs to build and expand their businesses. An added benefit is that this form of lending tends to favor women, helping them break a downward cycle of economic dependence. However, the reforms proposed by DeSoto are also needed, or else entrepreneurs will hit a "ceiling" in these societies for two reasons- capital needs for expansion and rewards for big ideas. It is one thing to borrow $100 to start a food stall, but the successful entrepreneur will want to expand with more stalls, or a restaurant. While an entrepreneur can grow a business with internally generated cash, in many cases growth will be quicker with access to larger loans or equity investors.

Also, if you can't sell a successful business (because it is extralegal and unlicensed), this will restrict the "big ideas" that are driven by an exit strategy or liquidity event. In particular, these "rewards" motivate entrepreneurs and attract equity investors. What would Silicon Valley look like if you could get small loans, but not venture capital? Would as many aspire to build the next Google? When entrepreneurs in the developing world are able to derive an enterprise value for their business, this will further drive economic activity.

Fundamentally, poverty alleviation and entrepreneurship are both driven by hope of a better life. Societies and economic systems need to allign incentives to allow these hopes to be realized. Microfinance is a good start, but more will be needed. And those that criticize microfinance lenders for moving to larger average loan sizes don't understand that these lenders are providing services for their successful customers... just as your local bank does.

Sachs or Easterly? A False Choice.

Last week, I was fortunate to meet with three cutting edge programs. They are on different edges of the Bopportunity, but I learned a lot from all three. Here are my observations, as well as a few thoughts on a book I read by William Easterly (www.nyu.edu/fas/institute/dri/Easterly/). I know bloggers are supposed to post more often, but hey, it was a busy week.

Jeffrey Sachs and the Millenium Villages Project- This is a very ambitious new development effort in Africa. The basic idea is to apply the Millenium Development Goal approach to selected villages (+/- 5,000 people) in Africa. The project takes a "teach a person to fish" approach, with a lot of community input in the project. The idea is to bring them improved agriculture, improved health and improved connectivity. He has assembled an excellent team of agronomists, engineers and doctors. For more info: www.earthinstitute.columbia.edu/mvp/ and www.unmillenniumproject.org/press/mvpfactsheet.htm

This project has been criticized by Prof. Easterly as "utopian" in a recent article in Foreign Policy and Easterly raises some good concerns. This lead me to read his book, The Elusive Quest for Growth. It is interesting that although Sachs and Easterly appear to have collaborated in the past, they are fighting publicly now. I think that is too bad... the problems are huge, and I think a more collaborative approach would be better.

Where do I come down, if anyone cares? Well, Easterly makes some strong points about how ineffective most international aid programs have been, but he doesn't offer much in the way of suggestions. As an entrepreneur, I like that Sachs is taking a shot... trying a new approach, with a good team. Will it work? That is the big question.

My concern with the Millennium Development Goals is that they rely heavily on increased funding from the developed nations. While Sachs had some slides on how the amounts pale in comparison to spending on Iraq, this is a very simplistic way to look at it. A closer review of the US federal budget shows that foreign aid already makes up a significant amount of discretionary spending, and I doubt that politically Americans (or French, Germans, Japanese) will dramatically increase these amounts. This number (called ODA) also is much smaller than the amount of foreign direct investment and charitable monies invested in development. So to me, relying on government sources strikes me as risky. To his credit, though, the Villages project is to show what we entrepreneurs call "proof of concept". If he can show significant progress (and he had several great examples with respect to agricultural yeilds and malaria reduction), than I think that other sources of funds may begin to get on board. The trick will then become seeing how much self sustaining economic activity can be generated in these villages. It is a very risky proposition, but it is the best approach I have found.

As for Professor Easterly, my observation is that there are several types of people in the development arena: 1) those that get paralyzed by the complexity of the issues involved in poverty, environmental degradation, disease and education and fail to take action; 2) those that are critics and point out all the things that don't work; 3) those that are trying to make a difference. I would love to see him move from #2 to #3. He has a lot of experience (much more than I)- but the magic comes from improving the lot of the poor. He has a new book out, which is on my reading list- White Man's Burden- and perhaps he offers more suggestions there. But a review by Prof Sen does not give me much hope. (www.foreignaffairs.org/20060301fareviewessay85214/amartya-sen/the-man-without-a-plan.html)

For both, I think that they have spent their careers in international development economics, and need to remember to look at the many impressive things accomplished by business, particularly the social entrepreneurs. It may be my personal bias, but the writings of DeSoto, Hart, Prahalad and Bornstein about these entrepreneurs seem to offer a very promissing, though much less "systemic" solution. But there is a wealth of people that are type #3. As we all know, entrepreneurship is not well suited to large, multinational planning efforts, so I doubt we will see a UN based Millennium Entrepreneur Project. And, frankly, my guess is that most entrepreneurs will be working a little higher on the pyramid ($1-3/day income)- which is why I have a lot of respect for Sachs's efforts at figuring out a way to help those in extreme poverty.

Well, that is more than I meant to write. I will post in a few days about my experiences with two entrepreneurial institutions: the faith based microfinance organization, Opportunity International (www.opportunity.org) and the "Changing Business for Good" organization, Bainbridge Graduate Institution (www.bgiedu.org).

My First Post on this Blog

Recently, I finished teaching a class at Colorado State University on "Social Entrepreneurship and Sustainable Business Strategies". It was a great group of students, and many of them have now graduated. I learned a lot from these students- together we tried to find examples of what is happening at the frontiers of social entrepreneurship and sustainable business, and I am grateful to them for learning about new organizations and initiatives. I am also grateful to our visitors- Hillary Mizia from New Belgium Brewing, a leader in sustainable business practices (see www.newbelgium.com, or better yet, come to Fort Collins and get a brewery tour), Libby Cook, founder of Wild Oats market, Wally Van Sickle of IdeaWild (www.ideawild.org) and Chet T. from Green Grants (www.greengrants.org). What you guys have done, and continue to do, inspired the class.

It was during this class that "BOPreneur" and "BOPportunity" came into being. Entrepreneurs exploit opportunities. Market needs generally come from unsolved problems. There are some major unsolved problems in the world today: poverty, health, education, environment (www.un.org/millenniumgoals). And they are unsolved after decades of well intentioned development projects . How do you make a significant difference? How do you build a sustainable organization? How do you scale it? That is what BOPreneurship is about.