Archive for January, 2008
The speakers for today’s talk were interesting, although Jesse Fink was the only one talking while Steve Blank asked the questions (I would have preferred that both talk). The two have a long history together and actually met on family vacations to the Galapagos. The discussion mostly focused on green investments as well as utilizing all financial markets (other than VCs) to create change. You can listen to the clip here or catch the notes below.
Jesse Fink Background
Mr. Fink is the cofounder of MissionPoint Capital and Priceline, and acts as President and CEO of Marshall Street Management (MSM). In 2004, MSM established MSM Capital Partners to manage its investments in clean technology and the environmental finance sector. He acted as COO of Walker Digital Inc. and Priceline.com, and previously worked at Georgia-Pacific, Citicorp, and CUC International. He received his B.S. in Resource Management from New York’s College of Environmental Science and Forestry and then received an MBA in Business & Marketing at Syracuse University’s School of Management.
Steve Blank Background
Mr. Blank is a retired serial entrepreneur with over 28 years of experience in the high technology sector. He has either founded or participated in eight Silicon Valley startups since 1978. They include E.piphany, Zilog, MIPS Computers (which Stanford President John Hennesy did research for), a workstation company, a supercomputer firm, a computer peripheral supplier, a military intelligence systems suplier (ESL) and a video game company. He is currently on the board of Macrovision, CafePress.com, IMVU, and Audobon National as well as being part of the California Coastal Commission. Currently Steve also teaches at UC Berkeley’s Haas Business School and at Columbia Business School.
MissionPoint Capital
The current focus of MissionPoint Capital is a transition to a low carbon economy. It focuses on investments in clean energy and environmental finance, as highlighted above, and his investment portfolio includes or has included solar, wind, and other clean technology investments. Mr. Fink pointed out that the East coast is focusing its investments in things like trading carbon credits (environmental finance) while the West coast is focusing on innovations in clean energy. What he would like to see is a marriage of this innovation and commercialization through the financial markets, and is investing in organizations he feels fit in the overlap. An example he gave is a wind turbine servicing company which is both a technology business and a service business.
Platform Companies
The purpose of the firm is to utilize very diverse individuals such as technology, policy, and market experts along with investors to thoroughly research an issue and answer the questions, “What is the problem?” and “How are we going to solve it?” Because there is a huge focus on research, they try to conceive of something called a platform company - an organization that is well positioned for growth. Sometimes these businesses don’t exist, sometimes they have to merge two or more organizations to form a platform company, but either way they try to identify and recognize such organizations
Engaging Market Mechanisms
As I’ve talked about earlier and was mentioned by Mr. Fink, many investors in Silicon Valley are engaged with green technology and startups. Other markets such as bonds, equity, and real estate, though, are not. One thing Mr. Fink says would be great to figure out is how each asset can be utilized to achieve the end goal of solving the HUGE issues we face today. As he sees it, nonprofits help push policy and solutions, markets create said solutions, and his role is to provide capital to create those solutions. Venture capital only solves a piece of the puzzle (creating innovations) and commercialization is providing the billions of dollars necessary to market these ideas. A slight problem also is that the payback is not as large as what some ventures are looking for, and utilizing other markets would provide a better fit in other scenarios.
Public Policy is Important Too
Mr. Fink is also engaged with studying policy making and decisions, primarily because he wants to influence said policy. Even though capital markets are amazing and there is still a lot of potential in that area, Mr. Fink recognizes it will only go so far. With policy, you can influence the flow of capital, and a simple example can be seen with corn based ethanol. It was heavily subsidized by the government and is horrible in the respect that there is a net loss of energy and studies are proving that it is equally bad for the environment. On the flip side, though, understanding how policy influences capital flow is empowering because creating good policy will help capital flow into new markets more effectively.
Entrepreneurs: Born or Made?
This question was posed in one of my previous posts, which can be found here, and the only reason I want to discuss it is because he gave the exact opposite response of my previous article. Mr. Fink decided to argue that entrepreneurs are born, rather than made, and he feels this is true because there are certain traits present at a young age that relate to entrepreneurship. The examples he gives are from his childhood and include a paper route and the constant generation of new ideas. While I personally did not have a paper route, I did start a candy business on the school bus for awhile and made some money from that. Overall, though, I’m not sure if I can believe the idea that entrepreneurs are only born, because I would definitely consider myself a made entrepreneur even though I did start the candy business.
Marriage and Meaning
Speaking of marriage, Mr. Fink met his wife in college and has since realized that people are more fulfilled doing things that are meaningful to them. In the past, nonprofits and for profits were battling, but have also realized that when they could come together and work synergistically they can create meaningful solutions to diverse problems. For example, in order for a marriage to work effectively both the husband and wife need to communicate successfully. In the business realm, nonprofits are beginning to hire business people so the two can understand each other and communicate more effectively.
The Difference Between Public and Private Funding
The private sector is great at jump-starting initiatives and testing the waters, and then the large-scale investments come from the public to test whether or not an initiative scales well. Currently, though, there is a shortage of public funds in the energy sector and as such investments are lacking. One great example currently happening is in the realm of solar, and even though I haven’t done a lot of personal research, I have a strong gut feeling that there is going to be an even larger amount of innovation and activity in this one area in the coming decades.
Audience Question: How did ethanol get where it is if it’s so bad?
When ethanol legislation was being pushed in congress, people weren’t focusing on the environmental side, but rather the energy independence aspect. At the time, people weren’t standing up for environmental impact, but since then there have been a number of people and groups talking about the negative ramifications of corn based ethanol. Another factor influencing the decision was the belief that even if it started out bad, it would eventually lead to cellulosic ethanol and other biofuels which are arguably much better. Essentially, corn based ethanol would start the activity and the hope was that it would lead to cellulosic ethanol.
Audience Question: What is Cap and Trade and how does it work?
The idea of setting up a cap and trade with carbon dioxide came from a successful implementation of a similar system for sulfur dioxide and other gases. The idea is to put a cap on the total number of emissions that can be made. Each company is allocated a certain number of credits, and if they invest in improvements that reduce their credit needs, they can then sell those credits to other businesses that haven’t successfully innovated. Such a system forces nearly everyone to innovate and make energy usage more efficient. The system is being successfully implemented with the Kyoto Protocol, and the question for the United States isn’t if but when.
Audience Question: Are there problems with combining nonprofits and for profits?
With nonprofits that have large endowments, they have the capability of making investments everywhere. Mr. Fink points out that there is so much money locked up in endowments that it should rather be released and directed towards large scale problems that are consistent with the programs that they support. One of the problems though is that people are still stuck with the idea of simply writing a check to show your support and forgetting about it. Instead, Mr. Fink wants us to consider the idea of investing in a nonprofit. In the example of nature conservancy, what if you could own a piece of land that is being protected by the organization you are supporting? An important question, and even though Mr. Fink is interested in the answer, he made a specific point of stating that he is not doing nonprofit stuff and feels that solutions to problems need to come from the commercial and investment sectors.
Audience Question: What’s the relationship between big utilities and small funded companies?
In the case of the big utilities, they are being forced to buy renewable energy sources. They are beginning to work with independent operators to find sources of renewable power, and are becoming accepting of this position because it solves demand needs. One point Mr. Fink made that I especially agree with is the idea of decentralized power and that people creating their own power is great. While the major utilities could see a conflict of interest in this model, it is much like the internet in the respect that it is necessary for a stable and successful network of energy.
Building Momentum in Green Investing
Early investors in the realm of green investing were not return focused but rather thought about double bottom line or triple bottom line investing (you can read my post on TBL economics here). They were not your mainstream investors, and didn’t care if they were great investments. What mainstream investors have realized is that some of these investments offer a great return, which in turn results in more capital, investors, entrepreneurs, and everything else involved. Essentially, we can fuel the economy with green collar workers. There will be a lot of jobs, careers, and wealth created in this field, and that can’t be easily outsources. A simple example to illustrate this point is that you can’t outsource the installation of solar panels. In fact, Mr. Fink references Van Jones (of whom I talked about in this post) and his point that everything can and potentially will be created in the community. Another final comment is that Mr. Fink feels that the realm of energy efficiency is vastly underserved and underinvested, and as such, has huge potential.
Conclusion and Final Lesson
Overall, the talk was very informative on different realms that investors like Mr. Fink are involved with. Even though there was a lot of information and statistics thrown around in this talk, I feel it all boils down to finding the best fit in the market for the ideas you have and the issues you want to solve. Even though VC money is great and cherished in Silicon Valley, there are a number of scenarios and circumstances in which different mechanisms would be more efficient and effective. Understanding and appreciating this point could be key to your future startup.
Wow! Our class today was absolutely AMAZING. We had a guest speaker by the name of Kevin Jones from Good Capital and he was absolutely fantastic. Before I get ahead of myself I should say that Sophia (the class co-leader) also gave an amazing presentation about her experience and research about philanthropic foundations and non-profits. There is a lot of information from this class so I’ll focus mostly on Kevin Jones and talk about Sophia’s presentation in a later post.
Background
Here is his background straight from the Good Capital website: “Kevin has extensive entrepreneurial and private investment experience in a range of technology and social enterprises. Kevin’s former positions include CEO of Net Market Makers, an $18 million revenue online community, research and events company, which was sold to Jupiter Media Metrix in 2000, having built Net Market Makers into the largest brand in business-to-business internet commerce. His previous six businesses all achieved market dominance before he left or sold them. In addition to starting businesses from scratch, Kevin is also adept at turnarounds. One, the Mississippi Business Journal had failed five times and was losing money in the face of two better-funded and more powerful rivals. Within three years, both rivals were out of business and the franchise was extended into local television, syndicated radio, trade shows and conferences. In addition, Kevin has been a columnist for Forbes and Business 2.0.”
Theory of a Silver Bullet
If only we reduced carbon dioxide emissions, we would solve global warming and all of our other problems… Or so some may argue. The idea of a “silver bullet” cure-all pervades many leader’s thought processes, and Mr. Jones made an excellent point that this is completely untrue and unfounded. Sure, if we take care of one aspect of an issue, it becomes a little less complicated, but attacking the issue from a variety of directions with a variety of tactics is much more effective. Even though we would like to simplify issues as much as possible to one key thing, for example, life is too messy for that to be the true case.
Defining a Problem
One of the most significant conundrums an organization can face is how to define a problem, because many times the perceived problem changes based on the way it is defined. Another issue is that many leaders want to constrain the problem in terms of what they’re used to, thus making it “easier” to solve. This constraint of view as well as misdefining a problem obviously work against organizations, and the problem only becomes more drastic when trying to have organizations from very different perspectives, such as nonprofit and for profits, attempting to work together. One of the key ways to work through these issues is to be open-minded communicators.
Communication is Key
Nonprofits focus on the mission and something called the “theory of change” while for profits look at return-on-investment (ROI) and the bottom line. This fundamental difference in approaching a problem or situation makes it difficult for the two to work together. One of the skills Mr. Jones has is talking both of these languages and effectively managing the relationships and politics between these organizations. Once that initial barrier is transcended, and trust is established, very different organizations can work together to accomplish extraordinary things.
Social Entrepreneurship Barriers
In 1970, Milton Friedman wrote an article in the New York Times that essentially stated that the only responsibility a business has is to maximize the return of its shareholders. This idea has become embedded in modern day economics, and has acted as a huge roadblock to the idea and implementation of social entrepreneurship. Another such text Mr. Jones identified is Andrew Carnegie’s book Gospel of Wealth which, I believe, argues that 95% of profits should stay in the hands of businesses to grow and expand while 5% is put into foundations. In order for foundations to become larger, the business realm has to grow proportionally larger. One of the major problems identified by these philosophies is sometimes the narrow focus on short-term earnings versus long-term value. In the past 10 years though, the rules have been changing as people are questioning these old paradigms.
Helping the Flow of Capital Get Smart
In 2001, there were a lot of passionate people, but not a lot going on in terms of organizations and success stories. These passionate individuals weren’t getting any money and they didn’t have the skills to bootstrap. Since then, though, the timing has changed and more infrastructure is developing to help these passionate individuals bring their ideas to market. Today there is more money, and Mr. Jones himself is working with individuals who have $10 million and above to invest in ideas/organizations that have a level of impact and value not seen in traditional systems. Essentially, he says he is helping the flow of capital get smart.
Establishing Credibility
One of the main problems with this market is the lack of validity it has thus far. Even though it has exploded in recent years, with more happening in the past six months versus the past 10 years, there is a lack of credibility that prevents even greater adoption. Mr. Jones makes a few suggestions, the first of which is a third party evaluation of the size and growth of the social entrepreneurship market. A second point is that third party evaluation is needed on the fifteen funds that exist (Acumen Fund, for example) that analyzes the deals that are made, what the asset class was, the size, and the impact of the investments made by these organizations. Essentially, we need to make the landscape clear and create context. A final point is that the best way to help a new category out is by having more people enter the marketplace. For example, there is nobody else like Acumen, and that is a problem, but if there is competition or someone comparable, we could evaluate and give even greater credibility to what they are accomplishing.
Enron is Good for Business
In the nonprofit world, there is neither competition nor creative destruction. We can all agree that it’s easy to see the nonprofit world doesn’t act competitively, but we first have to define creative destruction before we can evaluate it. An excellent example of creative destruction can be seen with Enron because it went bankrupt and disappeared off the map due to its horrible accounting practices instead of continuing to operate and doing deceptive things. The nonprofit world does not have this creative destruction because metrics rarely exist to measure impact and success of organizations. As such, there is no way of evaluating if an organization that argues it is successful is actually successful. And even if you attempt to measure impact, more or less money isn’t being distributed to these organizations based on impact, which is something that acts completely unlike market mechanisms (donor circles are trying to change that, though.)
Final Lesson and Conclusion
Mr. Jones was an absolutely amazing guest speaker with a lifetime of insight to share. After hearing his perspective on the realm of social entrepreneurship, I felt as if I had transcended the rat race of trying to figure out who’s who and what’s what and instead develop a broad, overarching picture of the field that makes it much easier to contextualize. His final example, which I think illustrates this point perfectly and adds perspective is that existing nonprofits are like the old telcos and we need citizen Skypes to change the playing field.
The focus of this week’s class was leadership and team building, and I was surprised and impressed by the presentation we had today. Our guest visitor was Mike Rothenberg, a former Stanford student who is now working at Bain as a consultant. Before class we had to read Colin Powell’s article titled A Leadership Primer, and another selection from Kouzes, Posner, and Peters titled The Leadership Challenge. I personally liked Mr. Powell’s article better, and a quick Google search will yield the 18 lessons he outlines. For the most part of this post, though, I would like to highlight the lessons from Mr. Rothenberg’s presentation on leading a team.
Emulate Your Favorite Leader’s Strengths
I really liked this point and I feel that it is important to find individuals who you look up to and admire. Many times, though, I think individuals focus on being exactly like the leader involved, rather than picking only their favorite characteristics. An example Mr. Rothenberg gives is Steve Jobs. He admires Apple’s CEO for his innovative, futuristic thought on design and usability. On the other hand, Mr. Rothenberg also thinks much of this may have come to the detriment of his personal life, and as such, would not care to emulate that aspect. I personally have many role models, all of which embody certain qualities that I admire.
It’s Not About the Leader, but the Team
Being put in a leadership role does not result in the idea that everything you say, goes. The leader’s role should be to encourage their team to be as successful, innovative, and cooperative as possible. In fact, the ultimate goal should be to make yourself as team leader useless. To elucidate this point, a team that is working extremely well together doesn’t need the leader to facilitate discussion or ask questions - the leader is essentially cut out of the picture.
Key’s to Success with Teams
- Assemble a killer team. Find individuals with different talents and skills sets, and leverage these strengths when accomplishing your tasks.
- Get buy-in and define goals. Having everyone on the same page and knowing what they’re working to accomplish prevents being unproductive and making decisions in the dark.
- Plan how to meet goals. Once the team has agreed on end goals and everyone knows more or less what everyone else is good at, it is time to create a plan of action for achieving those goals.
- Have fun executing together. This is the most important aspect of success, because if it isn’t fun, you will eventually run out of steam and no longer perform excellently.
Qualities of an Effective Leader
- Regularly solicit the advice of the team
- Ask how they can get the team members fully engaged
- Don’t get in other people’s way
- Listen to what you’re team members say.
- Ask team members how we can accomplish our goals and tasks
- Presume trust first, because then you’ll get it back
Conclusion
Even though this post was short, the information is extremely valuable and I definitely learned quite a bit from Mr. Rothenberg’s presentation. I personally feel that being an effective leader is like being a cheerleader for your team. You support them, cheer them on, encourage them when they’re down, praise them when they’re succeeding, and always respect them. If you keep this one idea in mind, I feel you can act in a way that results in embodying all of the other tips and lessons from this post.
Today’s speakers were absolutely phenomenal. I talked with some of the head people at ETL, and they personally agree that it was one of the top five presentations in the history of the program. Both Ron Conway and Mike Maples are angel investors and have somewhat different focuses in terms of what they invest in and why. I’ll dive more into their backgrounds below, but because this talk was so insightful, I highly recommend listening to it as well as reading this post.
Ron Conway Background
Mr. Conway is the founder and managing partner of Angel Investors LP. Throughout his extensive history in the Valley he has invested in over 500 startups including Google and Paypal, and more recently, Digg, Twitter, PBWiki, and Wikia. He has also served on many advisory boards including Facebook, Photobucket, RockYou, StumbleUpon, SendMail, Ask Jeeves, Napster, Plaxo, and SNOCAP. Not only does he work in the for profit realm, but he is also involved in numerous philanthropic causes and was #6 in Forbes Magazine’s Midas list of top “dealmakers” in 2006.
Mike Maples Background
Mr. Maples is the founder and managing partner of Maples Investments. He also co-founded Motive, Inc., the world’s leading broadband software company in 1997, and played many key roles in its growth from startup through sales of $100 million. Before starting Motive, he was responsible for worldwide product marketing at Tivoli Systems and did business development and product marketing at Silicon Graphics. In high school, Mike started his technology career by starting a software company that developed educational products and games. Finally, he holds an engineering degree from Stanford and an MBA from Harvard Business School.
Question One: Why should a startup look for an Angel?
- Money - Self explanatory.
- Contacts - Knowing people is advantageous, especially when certain skills are needed.
- Perspective - Someone who knows the process and what it takes to be successful prevents a startup from running around looking like a bunch of chickens with their head chopped off.
- Broader Range of Exit Options - Many times Angels know different ways and when the time is best for getting acquired, going public, or another exit option.
Question Two: What’s a good Angel?
A good angel is one that adds value to the team and is accessible. Mr. Conway pointed out that if your startup is focusing on an area that he is particularly passionate about, then there is a better chance that he will invest in you and be valuable to your organization. The other important characteristic is accessibility, especially when seeking feedback. If your startup has a bunch of questions, it is important that your Angel makes time to answer them and provide the perspective somewhat necessary for success.
Question Three: What are you looking for in opportunities?
When it comes to analyzing an opportunity, Angels first look within to judge whether or not they can take on an opportunity they are presented with. Mr. Maples said it best when he suggested that the idea is to develop an Ocean’s 11 team both internally and of Angel Investors. Angels sometimes have to work together to raise X number of dollars, and the average angel round raises between $500,000 and $1,000,000. Sometimes, though, they will work together to raise upwards $3,000,000. One of the biggest problems they see, though, is that many entrepreneurs come to them with just an idea. This is a problem because the investors would rather the entrepreneur come after having run experiments and tests first, because only the customer matters in terms of whether or not an idea is good. It also shows a lack of conviction on behalf of the entrepreneur.
Question Four: What do you do for the company?
Obviously, they write the check to get the startup on their way. They also use their contacts and perspective to fulfill the needs of the company by finding the right people with the right skills. Mr. Maples came up with another excellent analogy along the lines of a startup is like a racecar running full throttle and heading into town. The goal of the angel is to help turn all of the lights green at the right time instead of having the startup coming to a complete stop at every slight hiccup - a red light. Essentially, speed is everything to a startup.
Question Five: Help us understand what it means to have you involved in different ventures?
Essentially, the question is asking about the relationship between the angel and the startup. For example, an inexperienced CEO is gauged for investing purposes. Mr. Conway will only take on a limited number of inexperienced CEO’s so as not to occupy all of his time with their inevitable questions. The most important point he made though, is that as an angel, you want to avoid codependency at all costs. The role of an angel should instead be a multiplier. As an example, instead of trying to change the trajectory/mission/idea of a startup, which creates the codependency, the angel should be like a cheerleader that supports the trajectory/mission/idea from the get-go and instead multiplies their ability to accomplish their objectives.
Question Six: How do you build a portfolio of investors?
It’s a multistep process and gives you multiple chances for interactions, thus giving you the opportunity to effectively gauge whether or not an angel is a good fit for your organization. In the case of Ron Conway, he is passionate about issues such as monetizing video, improving search, better advertising while searching, and the gaming segment. If your startup is in those areas, he might be a key player in your team. The next step is for the angel to read your executive summary and see if they like your business idea. If so, then he will talk to the CEO/founder/president on the phone and proceed with a conversation/interview. If that goes well, then a meeting will be set up in person to further determine whether or not the angel will invest and is a good fit.
Question Seven: What’s the attrition rate for an angel?
- See 5 new deals a day.
- Get rid of 2 1/2-3 right away.
- Evaluate for a great executive summary and elevator pitch. If good, then the company will be called.
- Check the backdoors about the entrepreneur.
- If good from there, then schedule a meeting.
- Invest in one company a month.
- 1/3 of those investments go out of business, 1/3 return the money back, and 1/3 return 3-10 times the money back.
- 1 hit per investment cycle pays for the whole portfolio.
- If you are going to fail, fail gracefully.
Question Eight: How long of a runway (time-wise) do you give a company?
One of the favorite aspects of startups that both Mr. Conway and Mr. Maples look for is a low burn rate. The reason for this is that companies can try a bunch of different things to try and find something that works and makes money. One hard rule that Mr. Conway pointed out was that $1,000,000 should last over a year. In the first year, the team should be comprised of only 2-3 people, and within the next year must have between 4-6 people. Any larger and there becomes management issues and larger internal costs. Another key is to have a customer development strategy along with product development milestones, for the simple reason of ensuring cashflow. Finally, don’t scale until you know the product and business works.
Question Nine: How do you transition from Angel to VC?
In Mr. Conway’s case, he sends an exclusive email to his VC friends about who is going to be looking for funding in the next 30 days, and another about those who might be looking in 60-90 days. If the entrepreneur is great at meeting milestones, proves something dramatic, has 60 days worth of cash, that in itself will send a strong signal to VC’s. If the company can’t stand on its own, there really isn’t much an Angel can do.
Question Ten: Can the Silicon Valley ecosystem be replicated?
In short, no. Even though Silicon Valley is expensive, it is much cheaper compared to New York or Los Angeles. Mr. Conway added that to give investments in different locations an equal chance, he would spend the same amount of money on 3-4 investments in Silicon Valley as only a couple in New York. At most, in Silicon Valley a CEO should be paid $100,000 while in New York or Los Angeles they expect $300,000. In fact, you could draw a 25 mile radius around Stanford University and that is where you would end up receiving 75% of your returns.
Question Eleven: Can there be too much money chasing deals?
Again, the answer in short is no. The more choices an entrepreneur has, more entrepreneurs will end up coming to this ecosystem. Some companies do end up getting overfunded, and this is toxic. The reason being that it allows the company to pursue losing strategies for too long. Hyper frugal companies are more successful in Silicon Valley, and I would argue also in general. If you’re an aspiring entrepreneur looking for funding, Mr. Conway says you should get on a plane and come here. Mark Zuckerberg, founder of Facebook, recognized the ecosystem here and relocated to Silicon Valley.
Question Twelve: What would you recommend to create an entrepreneurial environment?
Instead of answering this question, Mr. Conway pointed out how one couldn’t easily be replicated. He pointed out that hte European ecosystem is tiny, as with all others around the country. He essentially argues that the very best entrepreneurs make sacrifices to come here to Silicon Valley. Because every advantage counts, especially in a startup, Mr Maples points out that other entrepreneurial environments will have some reds and yellows while Silicon Valley will have mostly greens.
Question Thirteen: How can we become Angel Investors?
- Have/build a rolodex of engineering help, business development help, and new recruiters.
- Invest in things that value expertise.
- Invest to add value.
Question Fourteen: What kind of advice do you have for young entrepreneurs?
- Satisfy a need you yourself experience.
- Go find 2-3 other cofounders with diverse skills.
- No excuse in life not to be passionate about something.
Question Fifteen: What will the world be like in the next 3-4 years?
A couple of prominent individuals in Silicon Valley have been talking about how search will radically change as it learns to process natural language instead of being keyword based. Another observation that I don’t necessary agree with is Mr. Conway’s comment that half of future websites will be video only. A final observation is that a lot of cool things are bound to happen as storage, processing, and broadband costs approach zero.
Final Questions, Comments, and Lessons
- Finding Passion. Passion has always been a part of entrepreneurship, and both Mr. Conway and Mr. Maples are passionate about helping other entrepreneurs out.
- Making a Decision. If it is a decision that is pretty much even on both sides, Mr. Maples suggests that you flip a coin and select a side. If ends up tails, for example, and you wanted heads, simply flip the coin over and do what that side suggested because that’s the decision you wanted to make anyway.
- Be Precise. When developing your business idea, focus on all aspects of the issue, both large and small. Be precise in your plan of attack and execute, execute, execute.
- Team and Idea Balance. All investors look more towards a team than the idea behind the team. The best idea in the world won’t succeed without a great team. A good ratio is 80% for the team, 20% for the idea, and what could also be considered equally important is a great market.
“Social entrepreneurship isn’t giving someone a fish or even teaching someone to fish. It is revolutionizing the fishing industry.” - Bill Drayton
Bill Drayton, the founder of Ashoka, is playing an extremely prominent role in our class thus far. Not only are we researching his organization and those organizations affiliated with his, but we are also researching his beliefs and thoughts on social entrepreneurship. In fact, I believe I could reasonably argue that he is either the most prominent individual in the realm of social entrepreneurship or definitely in the top five. Most of the class today revolved around the definition of social entrepreneurship, and Mr. Drayton came up multiple times in multiple contexts.
What is Social Entrepreneurship?
From catalyzing social change to harnessing the markets to solve issues like global warming, we came up with a ton of definitions for social entrepreneurship. We talked about different characteristics of social entrepreneurs, what they do, how they do it, what kind of impact they make, etc. Ultimately, we came to the conclusion that there are many definitions/characteristics of social entrepreneurship, and not all of which have to be present. My favorite is the one by Bill Drayton at the beginning of this article, and I would like to extend it by saying that the social entrepreneur’s goal should be to put themselves out of business (by eliminating the problem.)
Social Entrepreneurship Articles
We have been doing a lot of reading for this class, and most of the articles are easy to find online. A few have been from the Kauffman Foundation, a couple in random magazines, like this one from Fast Company, the Stanford Social Innovation Review, and the Harvard Business Review. A quick Google search and random blogs seem to comprise efficient methods of getting involved in the area, and this makes the research process very organic (and fun!).
Speed Dating
The activity we participated in today was “speed dating” in which each person spent two minutes talking to another person and just getting to know them. Each person only got to talk to three individuals, but after the speed dating activity we highlighted things we learned about each individual. Another nice little get-to-know-you game and worked well with the small amount of time we spent on it.
Infinite Vision Video
The video we watched today was about Aravind Eye Care, which was founded by Dr. G. Venkataswamy (Dr. V.) in 1976, and has a mission of eliminating needless blindness. It was very inspirational (as most have the videos have been), especially considering Dr. V. started his organization when he was much older than most. Over 1.4 million people are served every year by his clinics, and the video can be viewed here.
Conclusion
Today’s class was extremely fruitful in discussion, but not much of that is easily translated into a blog post. I think the main take-away is that social entrepreneurship is an emerging field/idea with a lot of energy and potential. While there are a few key leaders out there, we will see many, many more in the coming decades. Also, one of the greatest ways to explore a topic is to find similarly passionate individuals with different backgrounds and perspectives. The dialogue is rich with perspective and depth, and definitely led me to reconsider the idea of social entrepreneurship and what it entailed.