Fail early, fail often, and learn from your mistakes

 Africa, consulting, entrepreneurship, Social Entrepreneurship, strategy  1 Response »
Oct 102009
 

I had the pleasure to speak at the Africa Gathering in London this morning. (twitter feed here).

There were a number of emerging themes through the conference, and not necessarily the ones you might think– access to finance, more capital, education.

Nope. What came up again and again was:

TIA
This is Africa. Sometimes problems can seem overwhelming. I have talked about this before, but it bears repeating. My take on it: Break the problems down, solve what you can. Innovate around what you can’t.

Open Source/Open Platforms
FrontlineSMS, Android, Ubuntu Linux– these give you the tools and abilities to build cost-effective, replicable platforms that won’t break the bank. For all the thrill of open source technology in Silicon Valley, the true innovation may come in Africa, where stuff like Microsoft’s failing ability to register its software (due, admittedly, to fighting rampant software piracy) may mean that the sotware is unusable.

Open platforms create frameworks and fertile ground for new innovations. Enough said.

Turn up and do something… and listen when you get there.
The power of doing something, getting over your own inhibitions, going, turning up, is far more important than your ability to make a big, great plan.

On the other hand, the developing world works differently than it does in the developed world. Teddy Ruge of Project Diaspora.suggests getting a member of the diaspora on your team. In whatever case, however, listening is critical. Go. Take a risk. See what works. Give yourself permission to fail, early and often, and learn from your mistakes.

Africans have the solutions to African problems.
You know a lot, but you don’t know the context. Africans can solve African problems– this is the difference between Busines Incubation projects around entrepreneurship and NGO projects– Incubators should offer mentorship rather than direction. The essential difference is that mentorship offers assistance to someone to help them do what they want to do, rather than demanding that they do what you think they should do.

The flip side to the TIA problem is that it’s important to believe that things get better, that the creative, innovative entrepreneur inside can find a solution to the problem. The flip side to mentorship is the encouragement, so that when your entrepreneur finds a wall, he figures out how to go under, around, or through it– or to turn that wall to her own advantage.

I’m speaking at Africa Gathering in London

 Africa, entrepreneurship, Social Entrepreneurship, strategy, Uganda, UK  No Responses »
Oct 082009
 

The Hub, York Way
King’s X, London

9th-10th Oct, 2009.

I’ll be speaking about, in general, the challenges that investors and entrepreneurs face in Africa, with a specific focus on my partner organisation Appfrica Labs. Come out if you can.

Details at Africa Gathering and on the EventBrite page.

I’m on at 11 AM on Saturday– and to be quite honest, the lineup of speakers puts me in pretty esteemed company.

SoCap09: Metric-tastic

 entrepreneurship, mba, Social Entrepreneurship, strategy, UK  No Responses »
Sep 162009
 

My final post from (10000km and a two weeks after) SoCap.

Sorry this is late– I’ve just been indundated by the types of things that inundate your life at the end of five months on the road: I hadn’t slept in the same place (and mostly in the same country) for more than three weeks between April and September. A lot of laundry, email management, and general decompressing time needed to happen.

Metrics
MBA-ism is filled with metrics. In fact, there is some research on the impact of metric-heavy MBA thinking on entrepreneurship, and the basic idea is that the two schools of thought are are diametrically opposed.

Dr. Saras Sarasvathy from the Darden School of Business posts her findings at effectuation.org, which broadly suggest that for a certain type of entrepreneur, the whole idea of finding markets, estimating market sizes, and attempting to essentially pre-plan the value of a business is opposite to disruptive models of innovation where marekts are created– i.e., no MBA would have invested in an ice machine because the value of the harvested ice market was too big.

Metrics, Development-style
Monitoring and Evaluation (M&E) is a tricky, hard thing. It’s a nightmare for lots of international NGOs as the data collection is done from far away, sometimes by people who don’t understand the value of the information they are gathering (Appfrica may be on to something with their new approach to this…).

Now, add to the difficulty of collecting metrics the ability to compare several projects:

– A clean water project
– A new ICT training centre
– A new delivery system for vaccines
– A new collective agriculture scheme

All of these may cost the same, and have variable outputs– some will have smaller effects on more people, others might be drastically transformational for the lives of a very few. How do you compare them? How you choose between them? How do you decide which was more successful after they’ve run?

Measurement metrics
There are a few different approaches to this, many of the latest (ish) are in things like Blended Value and SROI. These attempt to monetise the outputs, so if you increase someone’s productivity (training), then their increased productivity can be measured, turned into dollars, and compared against the increased sales prices that the agriculture scheme generates for its members, and then you report them along with your financial statements. You can add them so that you achieve “profit” in “social returns”. It’s crude but it’s something.

(if you have any better ideas, then by all means suggest away– I don’t think anyone’s particularly tied to these, although they do yield some kind of apples-to-apples comparisons, although the methodologies for each monetisation vary so they end up being apples-to-pears all to often…)

Operational metrics
These are, generally, Key Performance Indicators (KPIs). These should be the sorts of things that tell you what’s going on while you’re working– cost per vaccine delivery, cost per avoided pregnancy, cost per trained person. This lets you know if you’re on- or off-target, and then you can start to adjust your thinking and approach based on what’s happening in the field.

My question
The question I had with all of this was “What does it all tell you?”

Here’s the thing: Saying you trained 100 people to use the Internet is almost meaningless when you’re 5000 miles away. Saying that you created $50,000 worth of increased productivity is even worse. What you’re trying to get to is a deeper understanding about the effect thatyouvé had on people’s lives.

You want to get to people’s stories. You need the context to know exactly what it means to increase someone’s effective wage $100 a month.

There’s an important thing happening at and around SoCap about creating better, more comparable metrics, but it’s important to not just be stuck in the Excel sheet, but to also communicate what it is that you’re trying to change. There are too many “successful” projects on the ground that achieved exactly what they set out to on the Excel sheet, but didn’t create lasting change.

SoCap09: Strategy 101

 entrepreneurship, Social Entrepreneurship, strategy  No Responses »
Sep 032009
 

The Bottom Line
One funny thing about business is that everything that your uncle told you from your early days is wrong– I was told by most adults as I grew up that the bottom line is what counts. It’s true… to a sense.

Strategy professionals take a different tactic: Profits and the bottom line is oxygen. You can’t live without it. A strategy that chases profits at the expense of all else, however, will likely not produce significant profits in the real world.

Think about it. You don’t walk around saying “Where can I find some oxygen?” You move around pursuing your own needs– taking care of the kids, getting to work, minimising time stuck on the Tube, getting the right diet and exercise, and the oxygen is there.

What happens
Companies that pursue profits kind of die. They are too focussed on the short term. They dilute their core service offering and don’t have a core competitive advantage. Imagine if you had a company that cared for lawns. Your strategy is to pursue profits at the expense of all else, but what you know is lawnmower care, maintenance, grass growing rates, fertiliser application, and the transport and logistics required to care for all of this.

Someone comes along and shows you slot machines. These have higher margins. Your strategy is to make the most money possible. You sell your mowers, fire your people, and buy a bunch of slot machines and try to go round and put them wherever appropriate. You don’t know the licensing, bar owners, etc. This isn’t your business. What do you think your profits will do?

Imagine, now, that you have a different strategy: To make the most beautiful lawns in the city. You do your business well. All of your employees take pride in their work. Customers flock to you.

SoCap09
What I’m hearing at SoCap is a lot of thought about impact along with investment– and most of the most interesting people are, broadly, making this point. Figure out what effects you want to see (beautiful lawns) over profit, and find the best entrepreneurs (or social entrepreneurs) that you can to build these businesses, whether they are for-, non-, or aren’t concerned about profits.

SoCap09: Common Good: a new model of socially responsible investing

 Uncategorized  No Responses »
Sep 022009
 

Social Capital Markets 2009
The SoCap conference is on, on my final few days in San Francisco. I’m here with an as-usual probably unusual perspective, as a for-profit worker in innovation but with a passion for development and social media.

There’s been, so far, a few interesting themes coming out, the first of which is Common Good investing.

Selling up without selling out
My first conference session was called “Selling up without selling out”, which addressed how companies like Ben & Jerry’s, Tom’s of Maine, or The Body Shop sell up to larger PE funds or trade sales and how to keep your social mission.

In true conference fashion, there was very little discussion of actual strategies. It seemed to boil down to:

  • Have a good relationship with the CSR people in the acquiring organisation (or, failing that, another power broker who has a remit or passion to keep your social mission alive)
  • Get acquired by the right person (who believes in your mission), i.e., a fund like Calvert or Satori Capital.
  • Don’t get acquired – build your business to succeed and generate cash (from Better World Books)

Socially Responsible Investing: 1995-2005(ish)
One of the most interesting things, however, was the closing remarks that Terry Mollner from Calvert made. He talked about the first tranche of socially responsible investing (a term he says should be falling by the wayside shortly).

Socially responsible investing is the next evolution from the no-sin funds– i.e., no guns, alcohol, or tobacco, which your financial advisor might have structured for you due to your personal or religious beliefs. It’s a well-structured, easy to understand, and exclusive– broadly, a list of companies or practises that are excluded from investment. The exclusive nature hearkens back to an us-vs.-them mentality– we (the enlightened few) are trying to change the world while them (profiteering corporate managers) are trying to amass all the wealth at the expense of anything.

These days are, from a certain perspective, over.

Common Good Investing
The new model is harder to define and understand, and it’s related to the shift to constant learning, that I’ve talked about before. There’s no good-housekeeping seal that shows that you are a good business. This person wants organic. That person wants Fair Trade. That person wants Local. Another wants pro-poor. Another is concerned with the environment. An awful lot of people just want to know that they’re doing the right thing, whatever the right thing is, but they aren’t sure which of the above is better.

In the UK, we’ve seen a shift to ethical branding– at the first Oxford Business and Environment Summit, which I co-founded, Ella Heeks, the marketing manager for Able & Cole talked about how they had carefully crafted their brand to be constantly on the leading edge of what it means to be doing good, so that their customers can trust that, when they shop A&C, they are getting low-carbon, organic, or whatever it is that they want to care about but don’t have the bandwidth to keep up with, because their learning capacity is being stressed by everything else. this is a great example of a brand helping people to learn (and A&C puts leaflets in with their vegetables telling you why this cabbage is good– it’s local, organic, sustainable, fair-waged, or whatever).

All of this makes responsible investing more tricky– it’s easy to say that one wants to invest in social enterprise, but we know that businesses that lead towards a more sustainable society in a broad sense– by doing simple things like pension plans, taking care of their workers, working towards their communities, or anything else, outperform similar businesses who don’t. Employee turnover has a cost. So do lawsuits. Happy workers are more productive.

Finding those businesses don’t lend themselves to a stock screen on your bloomberg machine, unfortunately. There are a few groups like the B Corp who are trying to make a list of things that companies should do, but doesn’t lend itself to what you care about.

The trick, it seems to me, is to investigate companies not just on their practises, but to see if they practice what they preach, and what their strategy is. In your company, make sure that your strategic priorities do include exactly what nonfinancial external effects you actually want to see from your business.