Big bets on big ideas

Aside

Big bets on big ideas – by philanthropists ‘Problem first, tool second’ is a maxim that is common among philanthropists, but far from common in the startup world.

We celebrate the fast growing entrepreneurial culture, but too many startups are ‘noddy projects’, built on exploiting little more than convenience or alacrity; often led by people with scant knowledge or experience of management or about the sector which they aim to enter and its customers.

Many fewer are the enterprises that start by identifying major needs or opportunities and building a business to fulfil them. Among these are the Young Foundation in the UK, which has long supported social enterprises, and Village Capital in New York, which has raised funds and then used them to bring experts to bear on major world problems.

But also there are individuals who have made millions and then sought to use their wealth to attack these problems, such as Bill Gates and Mark Zuckerberg. Do their approaches tell us anything about how we could address bigger issues and address them better?

What is common to most of them is that they aim to use the high level of their own expertise with which they have achieved their own success, and do so in wider, more beneficial fields where the returns are not necessarily financial.

Soon after Dustin Moskovitz, a Facebook co-founder, and his wife began their philanthropy five years go, they partnered with a charity research organisation called Give Well, that identifies projects that ‘provide outsize human benefits for the dollars invested’, through which they gave substantial sums, inter alia to a programme for distributing mosquito nets to reduce malaria, and to a programme that gives cash directly to poor people in Kenya and Uganda. More recently they have chosen to fund projects that mitigate potential global catastrophes, like an epidemic of a deadly disease, biological warfare and the dangers posed by artificial intelligence.

‘Tech people tend to be more interested in early-stage startups’, said one expert, ‘they typically support disruptive new ideas, get more involved in their giving and show a willingness to move quickly to another approach when one fails.’

Zuckerberg and his wife (who is a doctor) chose to invest funds in efforts to build basic tools to help the whole scientific community to make breakthroughs in research. A substantial sum went to create a new research institute in San Francisco – the ‘Biohub’, whose first project was to map all the cells in the body and set up a rapid strike force to tackle outbreaks of infectious diseases like Ebola and Zika viruses.

And they aim to advocate for more private money for this purpose, and will ‘likely take ownership stakes in for-profit companies doing promising work.’ Their multipronged approach – gifts, VC investments in businesses with social missions, and policy advocacy is described as ‘giving them maximum flexibility’.

Pierre Omidyar , founder of the eBay online auction and retail site, was an early pioneer of this concept. His philanthropic organisation focused on efforts to bring financial services to underserved populations. It financed a non-profit that makes microloans in Africa, Asia and Haiti; and it has invested in a peer-to-peer lender and in a company that provides insurance to low-income people in emerging markets. He participates in an advocacy group that partners with governments and others to encourage the distribution of money digitally instead of through cash handouts. ‘We have a motto here: problem first, tool second’, said the managing partner of his Foundation – an approach ‘widely adopted by the region’s philanthropists’.

The Omidyar Foundation which focuses on early-stage projects, also takes board seats and provides networking opportunities and training to the organisations it finances. ‘Half of the organisations report that our non-monetary assistance is as valuable as our monetary assistance’, says the managing partner.

Measuring success ‘is a bit of a fool’s errand’, he has said; but proactive, they are. At all events, principles like that of focusing on underfunded yet highly effective charities seem to remain paramount. So far we have rarely seen comparable individuals or organisations in the for-profit field.

Source: New York Times, 8.11.2016

John Whatmore, January, 2017

Advertisements

A part-time Accelerator – generating the next leaders

Aside

A part-time Accelerator – generating the next leaders
A charity has faced an excruciatingly difficult task in steadily scaling up its very part-time programme for helping young people to learn to be leaders

Next: nothing more while you are on holiday – till September 2, when I shall be writing about InnovateUK’s new mission statement and its implications.

‘Uprising’ was established in 2008 under the aegis of the Young Foundation and with government funding, with the aim of getting talented young people whose backgrounds make them under-represented in powerful places to take leadership roles in communities.

Undertaking the personal development of some 400 young people at a time, to help them in a role in which many people struggle, and which they might well not otherwise have sought, might be seen an overwhelming goal, not least for the limited resources and experience of a charity, itself a startup.

An award-winning leadership development programme with a role of Ambassadors that many charities would die for, it has 2,700 alumni, operates in seven cities, and has now reached the point where it manages without any government funding. Each cohort is of 45 young people; and there are currently nine cohorts running simultaneously. It generates in a very high proportion of its intake the confidence and belief that they have the power and skills to change issues that affect them and their local community.

The programme is designed to provide participants with the knowledge, networks, skills and confidence to take on leadership roles. Far from intensive, it is 9 months long and consists of a 3-hour meeting, once a week, with the first three months devoted to learning about leadership as such, and to enhancing leadership skills; and for the following 6 months participants work on a project [a format that is very similar to the Clore Programme for Leadership in the Arts] in small groups, often a social action campaign, for example to encourage young people to vote, to alleviate social exclusion caused by language barriers, or to support single parents.

In the first period, during which each participant will have a coach, they will hear from local councillors and MPs, and the likes of head teachers, police officers, social work leaders and business people – what they do and how to influence them; and sessions to help them develop their project management, fund-raising, communicating and networking skills – how to get to meet people and develop and retain relationships (‘all the stuff you don’t learn in school’!) After six weeks and for the duration of their project, each participant will have a mentor. Personal relationships are seen as of the essence in their journey.

Local managers now have the guidance of a manual to help them in running their programmes, which may nonetheless be adapted to local needs and local interests. With so many events and happenings to be organised and so many people involved, there is the constant worry that someone may not have been contacted, informed, booked or briefed; and the CEO feels that she is in constant ‘check-up’ mode, especially when there has been a high turn-over of staff. (And continuity of funding is an issue that is always with her.)

Connectivity is a current issue. Not only is it a part-time programme, but there are numerous occasional contributors, and semi-involved supporters – in all nearly 4,000 people – participants, mentors, coaches, speakers, alumni and staff, and most of them in different locations. A Customer Relations Management system is being installed that will include everyone, even suppliers, in order to facilitate communications – most of which must be by e-mail. And Twitter and Facebook constitute an important medium for maintaining a sense of coherence and the ethos of the organisation.

It is not just the alumni but what they then go on to achieve that is the full measure of this programme’s success.

John Whatmore
July 2015

See also below for three other examples of periodic programmes, two of them in social incubators/accelerators:

Innovators in education: The Young Foundation’s third education/incubation cohort
A programme of intensive learning sessions, the teams supported by staff, mentors and coaches and the Foundation’s network, with access to up to £150k of social investment – a model for non-residential Accelerators. May 2015 http://wp.me/p3beJt-aW

An Open Innovation Learning Network – for SMEs and others
I have just returned from a two-day workshop in Belgium called Plato, about mentoring small groups of senior managers in SMEs, who meet together regularly to draw on each other’s experience – a striking example of collaborative enterprise. May 2012. http://wp.me/p3beJt-H

A Social Enterprise Seed Camp
Bethnal Green Ventures [BGV] is a unique new venture of Social Innovation Camps, itself a commercial social enterprise started several years ago by two individuals, and now offering a variety of short accelerator-type programmes (of up to a week long) of social camps and in a number of different countries. BGV is now just starting a second round of 13-week accelerators – for technology-based social ventures in the UK. Feb
2012. http://wp.me/p3beJT-V

A non-residential Accelerator – in Education

Aside

Innovators in education: The Young Foundation’s third education/ incubation cohort
A programme of intensive learning sessions, the teams supported by staff, mentors and coaches and the Foundation’s network, with access to up to £150k of social investment – a model for non-residential Accelerators.

Most Accelerators have so far been residential, but the more these programmes move up the value chain, the more widely spread are the established businesses likely to be in any cohort. This is a model for such programmes in the way it brings the teams together for repeated periods of intensive development work, and with the option of using a communal space; and in the way it attaches to each team mentors in key roles.

The ‘Young Academy’ is an initiative by the Young Foundation (‘YF’) which has a long and enviable record in supporting social ventures, this one in pioneering the development of innovations in education under the aegis of Round 2 of the Cabinet Office’s Social Incubator Fund.

Its third cohort of the programme about to launch – for around ten to fifteen early-stage ventures all of whose projects are focused on reducing inequality in education. The previous two cohorts have worked with 17 projects, including one working to better enable access to employment and another to reinvigorate the careers advice available in schools. All but one of the ventures from the two earlier cohorts are surviving and thus contributing in various degrees to this objective – in terms of impact, extent and reach. The objective is to get these ventures up to a level where they are reliably revenue-generating; with a strong emphasis on rapid proto-typing and testing eg in a school.

Like YF’s earlier programmes, this one – a 6-month programme starting in late May – brings participants together regularly for (mostly) two days every two weeks at the Young Foundation offices in Bethnal Green, London – for two day-long learning sessions at a time. Of the 12 learning sessions (through May, June and July), the first 6 include the mapping of the target audience and understanding the winning of work (with commissioners, buyers and funders). The second 6 are more about turning things into reality. August is expected to be for refining and testing, including project management, future finance and pitching; and the teams will come together for Demo Day in September.

The programme provides monthly ‘Check-ins’ (progress meetings with two YF staff), a ‘strategic mentor’ (in loco chair of trustees) whom they will meet on average for half-an-hour a week, and a ‘coach’, (in loco chief financial officer, and hands on supporter of financial skills) whom they will meet on average for 2 hours a week, and access to YF’s invaluable array of contacts (and there is a mentor pool of 30 or 40 people). Like other YF programmes, it is non-residential, but unlike other programmes, though like many other Accelerators, there is now a common working space available to participants.

YF expect most of the 50 or so candidate teams will be around 1-2 years old, perhaps already have a small turn-over and have couple of members in the team, but there will be a wide range.

This ongoing YF programme is funded by £1.5mn from the Cabinet Office’s Social Incubator Fund, formally evaluated by New Philanthropy Capital, and match funded by UBS, by Bank of America, and by the Esmee Fairbairn Charitable Foundation.

Other similar YF venture support projects include The People’s Accelerator – which aims to support campaigns for social justice to become sustainable (the recent pilot was funded by Citizens UK and The Centre for Justice Innovation), ‘Transition’ – a series of workshops for a wide range of social innovation projects funded by EU; and a project to develop socially sustainable cities.

See also

US non-profit ‘Village Capital’ has a different perspective on social enterprise: objectives first, resources next
Village Capital sees capital as a resource in the service of its mission rather than as a determinant of new businesses; and puts projects and teams together on the basis of what will best achieve the social objectives it espouses. November 2013 (http://wp.me/p3beJt-6K)

Three pieces of Pixie Dust: Bethnal Green Ventures ‘accelerates’ six new social enterprises
Intensive support, lots of interaction (‘the kitchen a vital place’), and pressure to deliver make up the Pixie Dust. October 2012 (http://wp.me/p3beJt-2i)

Business Learning to become more personalised

Aside

Business Learning in Accelerators and their ilk will become increasingly personalised

Business learning provisions are increasingly migrating to online, and for very good reasons; so business learning and business development programmes will need to include learning coaches/mentors.

With the rise of the net, learning is being transformed: the President of MIT said when he spoke recently at Davos that his institution had started putting courses online a decade ago, and that MIT open coursework has accumulated 100 million individual learners, and this is increasing by one million a month. Stanford has been following suit.

A number of Accelerators give over a regular fixed time to learning – about business, usually consisting of lectures, presentations and discussions with experts, and about key topics such as IP, marketing and finance (among them Bethnal Green Ventures, Accelerator Academy, Entrepreneurfirst and the Young Foundation). Accelerator programmes, as short periods of intensive development for up to a dozen small groups of people who have ideas for innovations  (commercial, technical or social), have such an intensity that the participants focus strongly on the present needs of their developing venture. A standard syllabus (delivered in sessions of this kind) is increasingly seen as wasteful of valuable time – by those who already know or can do what they need to, and by those for whom it is not immediately relevant.

Learning from each other is another characteristic feature of co-working environments like Accelerators; and learning from each other’s learning experiences is part of that, and at least as important a source of learning as any other in this field. Every Friday, Watershed, Bristol invites its participants to meet and talk about their recent learnings; and an edited version is then put up on the intranet (http://wp.me/p3bejt-3Y).

We can expect general business learning sessions to be replaced by the Learning Coach/Mentor ( – among other specialist mentors,) who will keep in close contact with the evolving learning needs of programme participants, and perhaps on hand by Skype, helping individuals to make effective use of material that is readily available on the internet and relevant to their issues of the moment; and helping them to learn from each other’s learning. The special value of such a person is that in an Accelerator, the help that participants need is in meeting their immediate learning needs – as those change from day to day.

 

 

 

.

A cluster-based ‘Accesserator’

A cluster-based Accelerator…here helping to enable SMEs with innovative products to market to the big companies of this sector – all located close to one another; the process energised both by collaboration and competition

This novel application of the Accelerator in a cluster suggests how SMEs with innovative products can be promoted by a period of intensive support to help disseminate their innovations into organisations in the cluster, where the latter are working both collaboratively and competitively.

While most commonly Accelerators have been about helping aspiring entrepreneurs to develop their ideas into commercial ventures, some, like this one, have been about helping SMEs to grow. They have done so by focusing on the development of strategy (see Qi3 at http://goo.gl/Od6F1), business model (see The Young Foundation at http://goo.gl/ET1zQ), new concepts (see Watershed http://goo.gl/XCTxK), new products (see Plato, Belgium at http://goo.gl/hzBJ5), and new customer segments and marketing (Fintech below).

The FinTech Innovation Lab London is a three-month long collaborative Accelerator, in its third week as I write, in which seven young businesses in IT have been brought together, all of them carefully selected by the senior IT officers in the thirteen big companies in this project (twelve of them large banks) because their ‘products’ might be valuable to them.

The FinTech Innovation Lab, provides its seven companies with office space in the heart of Canary Wharf for these three months, and provides mentors to help them through the process. And a ‘chaperone’ was appointed by the senior IT officer in each company, whose job it is to help them talk to people in their bank (The cultures of the banking industry and the IT industry are quite different, and selling by the one into the other is recognised as a complicated and arduous process.)

A similar ‘Accelerator’ has been run for the last two years with a number of banks in New York – with evident success – enabling them to make use of products or services from other fields which have no necessary relationship to the banking industry.

The role of these ‘chaperones’ is to identify which of these young businesses might have something that would be of value to their company, and to help their staff to get in front of the right people in their company, people who could help them to make use of their products. One person who has experienced this process is said to have commented that his company was able to achieve in the three months what would otherwise have taken two years.

The process is energised by the fact that having committed to the project, each company’s senior IT officer and its ‘chaperone’ are simultaneously collaborating and competing with those of the other companies to get the most out of the process and out of the IT companies and what they have to offer. Every week, one of the big companies makes a presentation in the co-working space, for example about security problems, about their purchasing hoops, about their current challenges etc.

The programme finishes with ‘Demo Day’on 20th March; and hopes will focus on whether it has stimulated growth in the SMEs, whether it has brought innovative ideas into the banking industry, whether it has identified interesting investment opportunities to present to investors; and whether in the longer term it seems likely to inspire entrepreneurs to see potential in the financial services industry.

In addition to the thirteen big companies and the carefully selected companies in the IT industry (several of which are from other countries – reflecting the international nature of the banking industry), the parties to this exercise, all of whom can hope to gain from it and therefore have an interest in its success, are the major consultancy organisation that is managing the process (which has clients in the banking industry) and the predominant landlord in the area, which has provided space for new business nurseries in the hope that among them might be some future tenants. The TSB is making contributions to the programme. And it is formally supported by the Mayor of London.

 

If you are interested to learn more and meet the consultant who is running the process, email me john.whatmore@btinternet.com.

 

John WhatmoreThe Centre for Leadership in Creativity

Copyright 2013