Last week I had the honor of guest lecturing in John Greathouse’s Entrepreneurship class in the Technology Management Program at UC Santa Barbara. The topic of the day was where to draw entrepreneurial ideas from. I proposed that new ideas might come from using a social benefit lens.
What is a social benefit lens? To think about social benefit is to think about a product or service that would benefit an underserved population and to provide it commercially.
Let’s start with underserved populations. A good example is the underbanked. In the US alone, 60 million adults have minimal or non-existent relationships with traditional financial institutions leaving them vulnerable to over-priced services that essentially create a financial vacuum for the customer that’s tough to get on top of. Mango was founded in 2009 as a for-profit financial institution that empowers underbanked adults by providing customized, affordable, and high-quality financial services to help them better manage and get ahead in their financial status. With a presence in 6 global markets, Mango offers low-cost, sustainable solutions that provide convenience, service, and a positive customer experience.
Mango focuses on a specific marginalized customer but there are other opportunities to use social benefit as a lens for a for-profit business benefiting society.
Ultra Testing is a for-profit software testing business that looks to leverage the unique skill sets of the underemployed 1.5 million adults on the autism spectrum. Reasoning that software testing requires an incredible amount of focus for repetitive pattern recognition and problem solving, and with 80% of these adults unemployed, Ultra Network launched a business that meets the special social employment needs of these adults while creating a business that has a 20% higher bug detection ratio than standard testing services. It’s this efficiency that Ultra sells its clientele on, not the dual benefit that it’s solving a social issue at the same time.
By looking at social benefit businesses, there is a new more sustainable way to think about invigorating economies and the people who participate in them. Products and services with transactional prices force organizations to build businesses that must compete on product performance but will also create social value. Instead of creating charitable services to address inequities, innovating around social impact could create entirely new industries that will change the way we look at product value.
Entrepreneurs using a social benefit lens will not only stand out from the pack from a financing perspective but could create revolutionary new business models with historical significance.
Heat map of the regions participating in the FB group just prior to the start of the lecture series at Stanford yesterday. What other proof do we need that a global entrepreneurial mindset is in motion?
Tomorrow will be Day 1 of my first Startup Course at Stanford. Will I get credit for this? I wish. But I’ll get something better with my free online video course, an education in how the elite startup bootcamp is training their protégés and future investees from the President of Y-Combinator and a conversation with literally thousands of entrepreneurs set on changing the course of their lives and the world.
The course syllabus for CS183B is a veritable who’s who of the Silicon Valley startup world with the first class including Dustin Moskovitz, co-founder of Facebook as a guest lecturer. Perhaps that’s why Sam Altman, the 29 year old Professor elect, chose Facebook Groups as the place to convene conversation around this talk of the town course.
When I joined the Group last night there were over 15,000 members with a comment thread including 300 introductions crossing at least 42 countries (I stopped counting). And tons more sub-groups were developing as participants voluntarily broke into more geographical groups to figure out gathering points and discussion groups. There’s even a google spreadsheet listing the (to date) 425 global universities and 100 other group viewing locations for the online course.
Am I really ‘taking’ the course? No. But I am looking for answers to how the “experts” frame questions around challenging systems status quo, how innovative ideas are shaped and how B certification and other social benefit opportunities are addressed.
Regardless of those answers, it’s all pretty exciting and shows even more promise for the future of entrepreneurship. Kudos to Stanford for offering up this unique partnership and especially at a time when the world needs energy and ideas. As Michael Dell said at the final day of the Mashable Social Good Summit in NYC yesterday, “Entrepreneurs are the engines of the economies around the world. We need to create a culture that embraces entrepreneurs.”
p.s. for anyone interested in the pre-reads for tomorrow, they are here: Good and Bad Reasons to Become an Entrepreneur and Advice for Ambitious 19 year olds.
Kiva has launched a remarkable employee giving strategy that enterprise companies like Google, HP and Deutsche Bank have taken advantage of, and with strong executive leadership, these companies have delivered significant results.
CSR programs work towards lifting morale by demonstrating support for communities in need. Traditionally, these employee activities have included out-of-office hands-on volunteer activities on personal or professional time working directly with a charity’s beneficiaries. Kiva’s Team crowdfunding platform has created a low-risk opportunity for companies to engage employees in the act of lending. Recipients are not charity cases and the employees need not leave the office.
Not only are the results measurable and the funding recyclable, but the experiential influence of the lending process has an end-to-end productivity spectrum that leaves the employee feeling satisfied and wanting more.
Premal Shah, President of KIVA led a panel at SOCAP last week that gave us more details. Ranging from $25-$75, each of these companies created a program whereby their employees could lend the maximum value. Participation has been anywhere from 43-60% with HP clocking in at 120,000 employee participants to date. Google even created an online visual map that shows in real time, where the loan originated and the country it went to.
Here is a CSR program with unique and real potential to unlock awareness for the value of socially beneficial business platforms.
The founder of LinkedIn, Reid Hoffman took the entire concept a step further by issuing a challenge in 2012 by providing $1M outside of his organization. Kiva was instructed to distribute certificates delivered through social media to introduce new would-be investors to the concept. Over the course of 14 months, not only was $994,000 returned to Reid but in incremental $1.2M got invested by newly indoctrinated investors and entrepreneurs received loans at 10x’s the normal rate.
Like all CSR efforts, the question is what comes next. Crowdfunding is changing financial markets and millennials are seeking to be a part of the solution. Google invested in Oakland’s Impact HUB where Kiva Zip recipients can operate and Googlers can invest their time to assist in capacity building consultation. CSR is a valuable company perk but where can these well-meaning efforts drive real market change?
Photo credit: Sharyn Morrow
Last week, through hard work, commitment to detail and occasionally seeming against all odds – a tri-fecta of organizations launched Good Shirts
, a t-shirt collection to support UNICEF’s efforts to save kids affected by the famine in East Africa
. I have never launched a product from scratch before, let alone conceived, coordinated and launched a collection of products as a fundraiser. This effort took a boatload of passionate, dedicated people, teams of people. It took senior level buy-in from two companies and one NGO. It took re-thinking the rules on every front. It took a super cool idea leveraging an artist’s vision
. And a crack legal team navigating the tricky rules where the term ‘cause marketing’ can sometimes seem like an oxymoron. But most of all, it took stamina and sense of humor by more people than you can count on your fingers and toes. When BBH
answered our call and came to us with the concept, we immediately loved it. It was simple, articulated the need and was in a word, fun. But I don’t think any of us knew what we were in for. Seven days into its launch, we are all hoping Good Shirts becomes not just unique idea for the records, but a disruptive and successful fundraiser. We know the idea is right but we know we’re only half way to the finish line with its introduction. If we thought a good idea could have overnight success (and I’m not sure we did), we are reminded that diligent execution is, and continues to be, everything. With a bit more luck, a lot more hard work and allies everywhere who believe in kids, this idea could turn great any day now. The teams at BBH, Threadless
and the US Fund for UNICEF certainly won’t stop until it is.