Friday, February 13, 2009

Design That Matters

Yesterday, CSU was lucky to host Tim Prestero, CEO of Design That Matters (DtM). This is a non-profit design firm, based in the Boston area, that works with social enterprises in developing countries. Tim's firm is a TechAward Laureate, and he is a Draper Richards fellow.

But more importantly, Tim is a BOPreneur. With humor and humility, he shared his story and his work with our students and faculty. His focus was how to design both for "the world we have, and for the world we want."

I will briefly summarize a few points I took from his talk, with the caveat that listening to Tim is way better than reading Paul.

- His "A Ha" Moment. In the Peace Corps he found that what he had learned in engineering school didn't help him know the right thickness of concrete to keep a latrine from collapsing. He'd "gotten all the way through what (he) thought was a good education, and didn't know anything" that could help him try to make the world a better place. And he decided that his life would not be dedicated to "saving the world... one latrine at a time."

-Some Deserve to Die. In the first five years of life, companies often die for the wrong reasons. Feuding founders, doing their own taxes, hiring poorly. But in the next five years, companies often die for the right reasons. Mainly for not making things that people need and can afford.

-Ordinary Heroes. He is frustrated by the "myth making quality" of the field of social entrepreneurship. He survived the many blunders of the early days of DtM through "mulish persistence and a willingness to learn." He encouraged the group to read Jessica Livingston's book Founders at Work to get another perspective on starting a company.

-Stupid Designer Tricks. He discouraged students from doing design stunts ("hey, what if we used trained squirrels") or "Robinson Crusoe" type designs which adhere to local material availablility beyond reason. He gave examples, but I won't share them in order to protect him from being chased by said squirrels and appropriate technology nuts.

-Point of View. DtM process is to start with a problem, and deeply understand the context through discussions with customers and users. They look for variance in opinions (for instance, the doctors like the idea, but not the nurses). This allows them to arrive at a point of view, a statement of the user-context-need. His example for an infant incubator (Nepal): The user was "doctors and nurses at good regional clinics" and the need was "a locally serviceable isolette to assist in thermoregulation for low birthweight infants of 32 weeks of gestational age."

-Mapping a Twisted Mind. From there, they use mind maps to generate lots of ideas. The idea is to fail quickly, and dispose of most of the ideas, or as he eloquently put it, "don't polish your turds." He encouraged the audience to share ideas with others quickly, whether business plans, product concepts, etc. and warned them of the dangerous echo chamber of keeping ideas within their team.

-Link the Chain. Design with an understanding of who will "use-choose-pay the dues" and approve the product. If anyone in this chain says "no", the product will not get used. [this echoed Andy Hargadon's suggestions last week to design products that easily embed into existing systems]

-Don't Be (too) Small. For products, there is a "minimum efficient scale" (if you go smaller, it won't work in the system). It is up to the designer to understand this and not go smaller just to be clever.

-Focus (the F Bomb). He advocated "functional idealism." Rather than chasing big problems all over the place, ask: "what is the same thing I can do well over and over again." For DtM, that is user centered design for developing world. As he put it "Ideo at 10 cents on the dollar."

-Presto. Last, but not least, my favorite Prestero-ism from yesterday: "Doing good is no reason to run a bad business."
NOTE: Tim doesn't really look like this picture, but he must have looked like this some time. It does give him a rakish, BOPreneur look.

Thursday, February 12, 2009

Wall (Street) of Shame

Because the topic is not directly related to Bottom Of Pyramid or Entrepreneurship (in fact, it is the exact opposite and involves the Tip Top of the Pyramid and State Capitalism), I have started another blog:

Wall (Street) of Shame (

This blog is dedicated to getting back the unethical bonuses paid to executives of companies that take US government bail out money. The hope is that we will shame the executives and their companies into paying these back to the US Treasury.

If it works, we can then try some pressure on DC to fund some entrepreneurial BOP approaches!

My regular bleeps can rest assured that I will again focus on BOP issues on this blog.

Tuesday, February 10, 2009

For Shame

This post has been moved to my other blog, Wall (Street) of Shame.

Monday, February 09, 2009

Nudging the Social Sector

Interesting discussion over at Tactical Philanthropy on investing in non-profits, and the various roles financial capital can play. BOPreneurs should read it carefully, as several funders post their thoughts on this topic.

Be sure to read comment #14 from Mario Marino, one of the long term leaders in this field, and someone who has spent a long time both with "plain old" entrepreneurs and social entrepreneurs, as well as VC's and foundations. Since I am reading "Nudge" right now, I find his comments about the role of foundations as nudgers intriguing.

To expand on this just a bit more, "Nudge" suggests that a model of "libertarian paternalism" be adopted. When you need to provide choices (to customers, users, citizens) the authors suggest that you utilize "choice architecture" (dare I say "design") to bias decisions toward those "most likely to help, and least likely to inflict harm." Nudging can happen unintentionally (when you are eating with others, you eat more), but the use of choice architecture is an intentional act. Mario's post implies that several of the organizations he names are nudging, but doesn't discuss whether they are collaborating on intentional nudging, or using a similar choice architecture.

Certainly the field of philanthropy suffers from some of the inherent biases that the authors suggest hinder decision making and resource allocation. Raise your hand if you think that, on occasion, donors demonstrate a bias towards the status quo (at least in their actions, if not their brochures and websites) and towards being loss averse ("losing something makes you twice as miserable as gaining the same thing makes you happy"). And, "loss aversion helps produce inertia, meaning a strong desire to stick with your current holdings." OK, you can all put your hands down!

From my reading of the book, the foundations/donors are in a good position to nudge using choice architecture tools for their grantees/investees. They are in the business of funding, and therefore are in a position to use nudges to encourage better decisions. Unless, of course, the entrepreneurs gang up and refuse to take investments unless the donors follow a new rule set. That seems unlikely in the near future.

A step in this direction would be an effort to co-create a rule set that both improves decision making at the foundations and performance by those that are funded (or not). Perhaps the Center for Effective Philanthropy or Skoll Foundation will build on their early work in this field to drive more accountability into the sector. Right now, I think that this is happening slowly, if at all. Most organizations and foundations seem to be optimizing within their walls, rather than for the network as a whole. They are still working on the mousetrap.

Friday, February 06, 2009

Just Watch It

Here is a link to Andy Hargadon's talk "Carpe Creen'em" on Tuesday evening. If you missed it, you should take a look.

Andy made 4 points, distilled from his study of how innovation really happens:

1. It's not about the mousetrap.
2. Innovation is about connecting, not inventing.
3. The network is the innovation.
4. "The future is already here, it's just unevenly distributed." (quote from scifi writer William Gibson)

While his examples were not from the BOP, his application of social network theory to entrepreneurship is important. As I listened, examples of both failures and successes in the developing world came to mind. To date, we have more "Segways" than "electricity systems." Too many examples of inventions that required a systemic change to be succesful, instead of aligning and imbedding within the current systems.

While Andy didn't use the word "hack," perhaps he should have. Because his strategy of connecting innovations to networks, and changing them from within, is really a hacker's strategy. If you believe the current system is unsustainable, are you going to wait for the revolution to overturn it, or start hacking? I know what I'm doing. And this talk helped me think about how to do it better.

Tuesday, February 03, 2009

Green Confessional

"Hi, we're New Belgium, and we pollute."

That is one of the company's banners for trade shows. Even though New Belgium Brewing has been widely honored for its work toward acheiving a triple bottom line, the banner plainly states the truth. We hope it also gets people to realize that everyone contributes to pollution, and everyone can be part of a journey to heal our planet.

Almost all acts of consumption create environmental damage- the question is whether this damage can be minimized. Much like earlier work on eliminating defects in Total Quality Management, there can be improvements to a product or company's eco-footprint, but it is difficult to eliminate the fooprint entirely. And everyone is implicated. Producers and consumers.

As a former student once wrote me, "if it's not fun, it's not sustainable." I, for one, can't imagine a planet without good beer. Who would want to live there? But I am willing to consider my "drinking footprint." This is partly about what brand of beer I chose to drink (and how and where it was made), but it is also about how far I walk or ride to buy the beer, how I store it (basement or frig), and what I do with the bottle, can or growler when I am done. I think New Belgium, and some of the other craft brewers, are taking a broader view of what "drinking responsibly" means.

Companies working toward a triple bottom line struggle with how to communicate what they do. Choices include: 1) stay quiet, so you don't get criticized (but then you are less likely to have ripple effects on others), 2) ignore the critics, and keep plugging away, or 3) listen to the critics, and see what they can teach you.

New Belgium is trying the third path. The New York Times has a posting today on the how it is learning from the experience.

Monday, February 02, 2009

Carpe Green'em

If you live in Northern Colorado, you owe it to yourself to come hear Andy Hargadon from UC Davis speak on Tuesday, Feb. 3 (Room C142 Clark Hall @ 7pm) in our Sustainable Enterprise Speaker Series.

Andy will talk about how innovation really happens, and provide examples from the clean technology sector. Sure the economy is down, but recessions can be a good time to start a company (say like Microsoft and Apple), and this is a growing sector. Come hear Andy explain why "now is the time to start a clean tech company."

Entrepreneurs, economic development professionals, students and anyone else interested in how sustainability and innovation will drive our economy should be sure to attend.

The event is free, but registration is required. Click here. Hope to see you there! I GUARANTEE you will find it an interesting talk, or your money back.

Sunday, February 01, 2009

Blowing S#%T Up

I am a big Guy Kawasaki fan. And I have helped sell hundreds of copies of his book, Art of the Start, by assigning it for my entrepreneurship classes.* It is a great starting point for people interested in starting a new venture. My students love it. And, since I am teaching it, I reread it often. My copy is dog-eared and highlighted in a rainbow of hues.

But Guy left something out. Right up front. And it is important. Guy starts strong in the book's second paragraph: "The best reason to start an organization is to make meaing- to create a product or service that makes the world a better place." He then goes on to list four ways to "make meaning":

  • Make the world a better place.

  • Increase the quality of life.

  • Right a terrible wrong.

  • Prevent the end of something good.

A nice start. Very NICE. But entrepreneurship isn't always nice. Guy forgot the knockout punch. And that is where I come in. With my own addition to his list:
  • Destroy something that sucks!

See, as Joseph Schumpeter pointed out, capitalism involves creative destruction. And entrepreneurs are the opportunistic organisms that exploit niches in the system. They may be predators and feed off the weakened members of a herd. Or the decay of rotting organizations (oops, I mean organisms). Or take advantage of changing climates to out-compete (and eliminate) dinosaurs. Entrepreneurs can't just play nice and pretend that it is all about creating, ignoring the consequences of their visions for a changed (and better) world. Entrepreneurs are revolutionaries with a business model. And sometimes, competitors get hurt. Suddenly and without much warning.

Now I hasten to add that I am not advocating violence. In fact, this post was motivated in part by Paul Hawken's wonderful book, Blessed Unrest. One of my favorite sections traces Thoreau's work through to Gandhi and MLK. These men saw something that sucked and destroyed it, using non-violent means. They were changemaking giants- activists using social movements to achieve change. I am merely an entrepreneur (and educational arsonist) working to use business ventures to achieve impact. Non-violently. Inside the lines, basically.
Of course, when dinosaurs get threatened, it can get pretty crazy (just watch Jurassic Park, or listen to those Detroit executives). But history shows that when a collapse occurs, it often happens much faster than expected, and it often impacts those species or societies that thrived in the earlier ages. What made them successful before, now makes them weak and slow to respond. Some recent articles point to similar unexpected speed for collapsing organizations. Who knows, perhaps the current financial crises will be the K/T Extinction Event for some corporate leviathans.

So I find it ironic that the WEF Davos crew is discussing the BOP and releasing reports called NextBillions- Unleashing Business Potential in Untapped Markets this week (with only a footnote refernce to the folks at WRI who have had a blog for years with this name). This crew represents many of the dinosaurs that are going down if the entrepreneurs have their way. And smack in the middle of the report's "framework for innovation success" is "Creative Collaboration." That's right, these $5 billion global corporations should collaborate with NGOs, social entrepreneurs and activists. Lambs lying down with lions. Yin and yang. Very nice.

Ah yes, Alanis, isn't it ironic? Will Chevron and BP evolve into a renewable energy companies for BOP markets if they talk about it on the ski lift in Davos? Does the end of poverty come from Citi and JPMorganChase and their "leverage of shared resources and capabilities" that they read about in the report? Do the WEF'ers realize that as businesses scale up from down at the base of the pyramid, they could find themselves disrupted, in a terminal way? Clayton Christensen does. It could be a jagged little pill, couldn't it?
Excuse me if I don't hold my breath while some of these companies come up with the report's suggested "life enhancing options." Seems like some are too busy figuring out how to get bailed out by governments than to think of innovative new initiatives. Many of these companies have a long way to go before they even get to neutral, much less having sustainable business models. Because I am an unrepentant optimist, I hope they redesign their businesses and begin a journey toward sustainability (hey, how about a trip to Interface?). Some are starting. But because I am an entrepreneur, I am betting that many don't make it. And all that destruction will make for some exciting opportunities.

So, when you talk about your new venture, don't forget that part of your job is to "blow some S#%T up." If it sucks, part of your job is to destroy it.** Make life "nasty, brutish and short" for Leviathans too.***
* I get no kick backs from Guy. Zero, zilch, nada.
** Note to students: as with other things we have discussed in class, this may not go explicitly in your business plan. I am not advocating subtitles for "What Sucks" and "How We Will Destroy It." But make it part of your business planning, if not your business plan. It could also be a good rallying cry, and test for hiring.
***For my Enviro-bleeps: I am not advocating the extinction of whales, squids and other "monsters of the sea."