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Keeping Innovation Simple – social entrepreneurship

July 19th, 2010 by admin No comments »

I get little argument when I suggest to entrepreneurs that they keep their businesses simple, that they focus on getting the simple steps done first, or that they focus on products that meet simple consumer needs.

But TALKING ABOUT simplicity and actually enabling it are two different things. It’s amazing how complex things can get when you hire a team of bright minds, create partnerships or define the functions of your product!

I was on the website Echoing Green (a early-stage social venture firm) and came across the video for one of their “Green Fellows” – a woman named Jodie Wu.  I love the innovations that she is creating with a somewhat mundane (by US standards) technology and transforming it into something of value to the poor villagers in other countries around the world.  This is simplicity in action.

What I see here is an entrepreneur who is taking a basic/antiquated technology – the bicycle – and looking at the world through the eyes of the social entrepreneur in Africa, South America, India, or China – and coming up with an innovative way of approaching this technology for alternative uses.

Will the organization itself get funding, grow successfully and launch? Perhaps? But they certainly are off to an innovative approach to social entrepreneurship that may re-purpose an old technology for the benefit of the Third World.

Have examples of simplicity that you can share? I’d love to hear from you…

The U.S. Constitution – creativity & innovation in Action

July 9th, 2010 by admin 4 comments »

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

The National Constitution Center, in Philadelphia, is a massive structure located near old-town Philadelphia (2 blocks from Independence Hall).  I visited the museum on July 4th – a fitting day to be prancing around Philadelphia – at 10:00 am that day, I was the only visitor walking around the 2nd floor  huge (circular) multimedia atrium and one of only 8 people to sit through the first showing in the theater-in-the-round presentation (“We the People”) on the Constitution.

This museum is a must-see if you want to understand how this country was founded on principles of freedom, democracy and innovation.  During the 17-minute “We the People” live show, it really started to sink in with me how special this country is that we live in…and how the combined creative genius of Jefferson, Franklin, Paine,  Adams, Hamilton and others living in America in the late 1770-1790 time-frame came together to form a government and nation never before attempted.

The Consitution was delivered on Sept 17, 1787, after months of debate and draft in what was to become know as the Philadelphia Convention.  So, not a bad place to be on July 4th, 2010.

Who Wrote the Constitution

Picture a team brainstorm meeting that you have attended in the past and the process and results it yielded.  Now picture a similar meeting – only the participants are Ben Franklin, Thomas Jefferson, Thomas Paine, John Adams, Alexander Hamilton, James Madison and other luminaries.

Interesting “sketches” on many of the Constitution’s authors were written by William Pierce.

Madison is generally credited for drafting the Constitution. But the ideas contained in it were the result of 12 colonies/states (one state did not send a delegate) all contributing ideas and sending their most critical thinkers to the Philadelphia Convention.

Thus, the Convention had was incredible intellectual horse power behind it.  It also had ideas and ideals from men who had studied governments all over the world and throughout history.  The goals, in my opinion, for these men was to craft something that would suit the particular situation that America found itself in following the Revolution:

  • America was a relatively newly settled land, each State in the union had its own priorities and needs
  • The patriotism of the American people was at an all-time high
  • The States required coordination between them and a set of laws that would govern them
  • The entire operation could not be headed by a dictator, but required a unique set of democratic processes in order that all opinions/needs would be fairly heard

The Creative Process at Work

But Horse Power is not enough.  For amazing results to play out of this milieu, the leaders needed a process. I cannot claim to be an historical expert on the process that played out, but I plan to learn more about it.

By my estimation, the creative problem solving process they employed was astounding.  The process needed to identify the critical needs of the day, brainstorm creative ways that the States could COLLECTIVELY and separately, solve these issues – and come up with common vision from all this.  Finally, the group of delegates had to identify a future implementation process by which the newly formed solution could unfold over time as new ideas and needs were revealed.  At any one of these junctures, things could have fallen apart.

Failure to come up with a way to “unite” the states?  Things fall apart.

Can’t think of a way that we can ensure freedom ? Things fall apart

You fail to be able to get the delegates to “converge” on a set of solutions that benefits all? Things fall apart.

No options for growing the collective prosperity of a newly formed “united states”?  Things fall apart.

Can’t think of a process by which all this can evolve (try thinking out 200 years into the future – it ain’t easy!).  Things fall apart.

This was Pretty Darn Innovative

What made the US Constitution so innovative when it was adopted in 1787?

  • The initial “brainstorming” process include separate plans for the Constitution from Virginia, South Carolina, New Jersey, Alexander Hamilton (a plan resembling the British government) and Connecticut
  • The document was crafted so it could be additive & flexible (it has been amended 27 times since, including the first 10 amendments in 1787-8)
  • It was the first document of its kind in modern times to include Freedom as a central theme, yet the heated topic of the day was slavery, yet the plan avoided this issue initially so as to be ratified – otherwise the debate might have lasted years or decades and nothing would have been accomplished
  • The document itself allowed for a complete process for democratic vote and amendment
  • The document included an elaborate plan for Balance - a judiciary system, a legislative branch and executive decision-making
  • Required was some fair way for States to vote on future issues – so a system for representation and voting needed to be put into effect

This is Hard Work!

I must say, that Washington,  as a leader of this highly innovative new “experiment” has also impressed me.  Our first president had to take on a role that no human being had ever experienced – “President” of a “united” group of men and women who were anything but united.The newly united states were a pot full of idealistic, commercial, political and social ideas  – all simmering to a boil.  Washington had to be SOME POLITICIAN to get many factions to work with one another (heck his two top men, Jefferson and Adams, could not even get along), interpret the newly formed constitution, continue to protect his country, battle the concept of slavery in a land that had just declared itself free.

There’s a Lot More to this Story

I’m only scratching the surface here, being neither a top historian, nor actually being there over 200 years ago – I can only guess at some of the processes and innovations that came up during the Philadelphia Convention and beyond it…I’d love to hear your thoughts on additional areas of Creativity and Innovation that I”ve undoubtedly missed.

Hunger-driven creativity

June 30th, 2010 by admin 1 comment »

One of my favorite charities is Opportunity International, a global non-profit that in the past 27 years has put in place an incredible network of overseas banks and NGO partnerships to provide small loans (aka “micro-finance”) to poverty-stricken families starting small businesses. These occur in Africa, Asia, and Latin America primarily.

A lot of small loans moving the needle

According to Opportunity’s SVP of Resource Development, Dave Knibbe, 1.3 million individual loans (each on average about $150 or so in size) were given out to “clients” in 2009. That’s a LOT of entrepreneurs getting funding at a micro level…enough to move the needle in a small community, given the loans are appropriated on a group basis (usually 20-30 families cross-collateralizing each others’ loans as a group and paying small interest weekly) Opportunity claims a 96+% repayment rate on these micro loans…and the loan money is then available for the next family and the next and the next….

Opportunity reports that there are some 2 billion people in the world today living with under $2/day in wages or income.  The organization is on a mission to affect 1 billion people through it’s financial operations in the coming years.

Seeing the work – in Latin America

My recent trip to see Opportunity’s work took me (along with daughter, Kayla), to Colombia.  We visited deeply impoverished sites outside the capital, Bogota, and the coastal city of Cartagena.  Our week-long visit with other families who give to Opportunity, consisted of visits to the local bank/NGO offices to meet “loan officers” and regional managers and then out to visit “clients”, most of whom ate living in unbelievable conditions…photos of the trip are posted HERE.

What drives creativity?

This is my 3rd trip to see this innovative organization in action – and these trips are ALWAYS uplifting…because it turns out that the street barracks of Cartagena, Colombia — or the villages of Malawi, Africa or the inner city in Manila, Philippines — are full of highly motivated and creative entrepreneurs. They create businesses ranging from pottery to vegetable stands to leather goods to beauty salons…

These Entrepreneurs are a whole lot different from those that I’ve deal with for the past 20 years in the Silicon Valley. The education they have may not be what it is in the Silicon Valley, but the drive is is more focused and never-ending.

By  our U.S. standards these are very basic businesses with basic business models.  What amazes me is the differences in motivation. It got me thinking about 3 types of entrepreneurs…the typical American entrepreneur I’ve engaged with either seems to be focused on social needs or conquest/wealth generation.  For example, I know a lot of young entrepreneurs who have engaged with Web 2.0 and developed unique social applications – it was their way of providing something back to the world to allow us all to be more social.  Some of these companies haven’t created great wealth, but they’ve connected people like never before. Most of the entrepreneurs I’ve dealt with are after wealth creation or simply proving they can build something (“out for the kill”). Looking at Abraham Maslow‘s theory on hierarchy of human needs (see purple band above), these two sets of entrepreneurs fill needs for Social growth or Esteem.

The Opportunity entrepreneur (90% are woman, ages 25-55), in contrast, is driven by the need to feed her family personal hunger, desire for shelter, desire for safety – and or desire to see her children have a better life. Most are driven by all three.  Farther down on Maslow’s hierchy they are.  There’s quite a bit of motivation involved when your food shelter and clothing depends upon it.  The result is quite a bit of human ingenuity…finding solutions to getting around the system, using I call it true hunger-driven creativity.

At the top of the Pyramid

The third type of entrepreneur, an area that I am exploring in detail with my own career these days, is what I call the “social entrepreneur”.  These are typically those that have started a non-profit, or even a foundation, to serve others or a for-profit with a triple-bottom line.  These are sometimes successful entrepreneurs who have decided to give something back to others. Examples include Bill George, Bill & Melinda Gates, Bob Buford (author of HalfTime). Their Life work is focused on the top of the pyramid, self-actualization – typically in giving to others.

Although I teach a course at UC Berkeley about all the impressive ways that entrepreneurs use their creativity – in all aspects of business – I’m truly amazed when I visit and interact with hunger-driven entrepreneurs.

Of the 3 types of entrepreneurs, can you guess who shows the most gratitude?

Bogotá

Pepsi’s Innovative Business Model for Entrepreneurship

June 14th, 2010 by admin 2 comments »

I was intrigued to hear about the Pepsico 10 challenge, announced at InternetWeek NY in May.

The challenge involves four main components:

How it works

Contestants from around the world are invited to submit their companies for the contest. The only criteria is that require is that the company already have a product, be producing >$250,000 year in revenue, and (presumably, but it isn’t stated on the website) the company should be focused on the Internet (but who isn’t nowadays?).  Ten companies will be selected during a 2-day event at Pepsi headquarters as finalists and invited to pitch to a panel of VCs, Pepsi execs, and other participants.  The winner wins money, fame and a host of contacts for increasing the lifespan of their company.

More details available here.

What’s innovative about this?

It seems like a win-win-win for all parties involved. Entrepreneurs who submit plans presumably get feedback on what works and what doesn’t about their current business model – and what’s needed to scale their businesses.  Mashable is a big winner in associating itself with leading edge entrepreneurial ideas – particularly those that are related to social media. This helps steal the thunder from its competitors (like TechCrunch) by allowing Mashable to report on innovations in entrepreneurship AHEAD of the competition and track potential hot companies of tomorrow.  InternetWeek wins by associating itself with a new model for recognizing entrepreneurship – potentially increasing its readership and following (among those who want to be on the leading edge of technology).  Highland Capital wins by seeing some of the best plans on the planet.  Pepsi, who presumably is matching the largest monetary and time commitment to this experiment, is potentially the biggest winner (although it may be hard to measure this) by associating its most precious asset – it’s brand/name – with young, risk-taking, intelligent entrepreneurs who are trying to change the world. In the world of the Millenials, these young social media start-up execs represent the future leaders…so Pepsi is associating itself with a great group of people.

Wait, Where Have We Seen This Before (Welcome Back Kotter)?

For those of you old enough to remember, the word “challenge” has a rich history at Pepsi, and is in fact a major component of the Pepsi brand. In 1981, here is one of the early commercials released by Pepsi in a series of “Challenges”…which went on to win many advertising and branding awards:

So, creating a “challenge,” in this case to find leading edge social media companies and technologies is a smart fit for this particular company and brand.

What Pepsi, Highland Capital and Mashable May be Missing

A short-coming I see from this model is the lack of specificity in the type of business start-up that is being sought.  What area of consumer internet should the company be from?  What customer needs should the technology address?  By being open to a wide range of opportunities, I think the contest creators may get a lot of applicants who really do not fit the criteria for what Pepsi was initially looking for.  I also think a lot of companies will pass on the opportunity to submit applications because of their uncertainty as to what Pepsi is really seeking.  On the flip-side, by keeping the “scope” wide, presumably the challenge brings in a wider range of opportunities.
Another short-coming might be awareness. The best plans will come to this contest only if entrepreneurs are aware of the contest.  Among 10 entrepreneurs I personally spoke with, only one was aware of the “Challenge” and no one I spoke with planned to submit a business plan.  (yes I realize my sampling was small and random)  Some significant marketing dollars (and lots more PR) need to be applied to this contest in order for it to become known to the community.  Perhaps partnering with Universities, other online social media broadcasters (TechCrunch or Vator.tv, for example) will help in the long run. As a professor at UC Berkeley, I’d love to get my MBA and Engineering students thinking about the contest next year.  Hopefully, Pepsi realizes that it needs to commit to 4-5 years of this model in order to really reap the benefit.

Noth withstanding these things, I like the fact that a major brand who could have spent millions by throwing out more advertising, billboards, and magazine back covers, is devoting some attention to this (yes, I realize the budget for this contest was infinitesimlly small compared to Pepsi’s overall brand annual budget). Give them kudos for trying…and give Mashable and Highland high marks for assisting in an innovative new approach to partnering for entrepreneurship.

Y Combinator …look out! There’s a new innovative model on the block.

The Beatles – Innovation & The Medici Effect

May 23rd, 2010 by admin 3 comments »

Anyone out there have a thing for the Beatles?

OK…I’ll admit I’ve been a fan of the “Fab 4″ since my high-school days in Leonia, NJ.  Maybe “fan” is too light a term.

And, having just spent the past 2 days touring Liverpool (I described it to friends and family as my “Pilgrimage to Mecca”) and reading Jonathan Gould’s 2007 book Can’t Buy Me Love, I’m thinking about what turned the Beatles and  “Beatlemania” into the biggest musical sensation of the 20th Century.  What was the spark of creativity that allowed these four tocreate their own style out of the Liverpool “beat” scene?

Liverpool in 1962 was like Florence in 1452?

I think I have some answers after exploring Liverpool, learning about it’s history, going through the Beatles Experience/Story (museum) and reading Gould’s book.  Liverpool became a modern-day musical version of Florence of the 15th Century.  Liverpool emerged emerged out of no-where, as the newIntersection of rock-and-roll, “beat” music and new attitudes and it was the Beatles that turned creativity into  innovation – invoking  a new style of music that was different from anything else the world had heard before…and as a result, the Beatles catapulted to stardom unlike any other band before or after it. 

How did this happen?

Liverpool has held a reputation – even before WWII – as a blue-collar, rough-and-tumble town.  (although I found it actually quite gentrified when I visited this week).  As primarily a shipping port after WWII the city was also  far smaller, more blue-collar and far less “metropolitan”  than London.  At the time John Winston Lennon, James Paul McCartney, Richard Starkey (Ringo Starr) and George Harrison met , Liverpool was well-known for it’s territory-based teenage gangs – and although they weren’t as troublesome as today’s street gangs, they tended to grow and thrive in small groups – competing with one another for neighborhood supremacy.  These mini “city-states” as it were had another interesting characteristic that was found in Florence of the 1500s – they were quite DIVERSE.  The city, more than the average city in Europe was a melting pot of Gaelic, Scottish, Welsh, Irish and English – and the Irish and Welsh are know for their singing abilities. Thus was born a minor “warfare” between opposing gangs to see who could produce the most “new age” music of the time – and that music which emerged was called “Beat” music.

Diversity, as it turns out is the major theme of Frans Johansson‘s work The Medici Effect, in which he describes the creative results of highly diverse cities or groups of people.  I talk about the Medici Effect in a prior post on Intersection, Medici Effect and Creativity. The melting pot of Liverpool created this same kind of diversity for music and entertainment.

While Liverpool was diverse in its musical talent, it’s people and its neighborhoods, it wasn’t completely immune to changes taking place in the world.  Elvis Presley, a hero of Lennon and McCartney, had risen to global fame just 2 years previously.  Little Richard was also admired and studied by the Beatles, as were many other rhythm and blues singers (mostly American) of the early 1960s.

In 1961 and 1962, the Band played extensively in Hamburg, Germany – another melting pot of musical talents from around the world. The Beatles, though, were able to create something new from existing elements.  It was the combination of their own local British  music known as “Beat” music, with what they learned in Hamburg watching others, and combined with a look and feel that their manager (Brian Epstein) brought to them (hair styles consistent mop-style hair, the “group” feel enhanced by one “mod suit uniform for each).

It is uncertain whether fan hysteria brought the Beatles to life, or whether their music and attitudes did the trick.  Whatever the reason, the Creativity and Innovation by this one group of four men still four lasts decades after their 1970 split.  I even find that my own children, Millenials every last one of them, know and recognize Beatles music.  What other groups in the history of rock and roll can claim this much of a renaissance and this long of a lasting impression on generations of music-lovers?

I’d like to hear your opinion….