Friday, November 17, 2006

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.

Thursday, November 16, 2006

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.

Saturday, November 04, 2006 where are you?

Dear Larry and Sergey: 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

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 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 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,