Social Entrepeneurship class Public Policy 190 (10/5/2004)

This panel, on "Starting up a Start-up" was moderated by Amber Nystrom, of the Women's Technology Cluster. Panel members were:

• Judy Koch, Bring Me a Book Foundation
  
• Temp Keller, Resources for Indispensable Schools and Educators
  
• Sally Madsen, IGNITE Innovations
  
• Steve Leventhal, Fritz Institution

Each panel member gave a quick background and description of the "Aha!" moment that led them to start or join their social venture.
Judy Koch described purchasing a manufacturing business and tripling revenues to $95M in one year. As a benefit to her employees, she tried to help them teach their children to read, establishing a lending library. It was such a popular benefit that she established Bring Me a Book Foundation to provide the benefit to others.
Temp Keller was a teacher in the East Palo Alto school system, seeing a lot of his cohort (young, energetic from programs like Teach for America) get frustrated and drop out just as they were starting to gain confidence and experience. He decided that it would be better to step back from direct contact with the students and have a broader impact to more students.
Sally Madsen was a student at Stanford, working on a class project to provide alternate lighting systems (instead of kerosene lanterns) to people in the developing world. Their white LED lights had the potential to be a breakthrough solution, so they started IGNITE, a for-profit company to productize it.
Steve Leventhal described a terrible car crash that he was in, from which he emerged unscathed. With a second lease on life, he decided to change from his dot-com career to one more directly helping people. His first project was providing a medical information network and computer training to 200 health professionals in Zimbabwe, and he's curerntly working on new ways of providing disaster assistance with a focus on logistics.
Amber Nystrom said that after working on political campaigns and corporate projects, she couldn't find anything that could keep her attention for more than 6 months until she started working in the social venture arena, where she gets continuous reinforcement by people she likes who have done interesting things.

The rest of the evening was split mostly into advice for aspiring social entrepreneurs and experiences based upon their ventures. I'll group them accordingly:

Advice for Social Entrepreneurs

Judy Koch

Find your passion first and line up funding. It takes a lot of both to start your own social venture. But you can find "entry level" positions at lots of places, so don't feel that you have to start your own. Work elsewhere for a couple of years to understand the issues and build a network.

Temp Keller

Work on the front lines first, before trying to operate a "behind-the-scenes" scaling effort. To your passion, add a plan, but be flexible about evolving it. When lining up support, target three groups in the following order:

1. Wisdom: People who can provide feedback and validate the idea
   
2. Wealth: People who might be willing to fund it
   
3. Work: People who can contribute time and effort to making the venture succeed
   

Sally Madsen

Consider casting your social venture as a for-profit entity. Generating cash from sales is a way to enable your venture to scale to meet the needs of millions, rather than relying on fundraising. Just Do It! The commitment from the team generated great momentum and connections that would not have been available if they had spent six months more analyzing.

Steve Leventhal

You can't be afraid of failure. Social entrepreneurs must have insatiable curiosity. There's plenty of money out there, but the way that it is allocated is hugely dysfunctional. There's too much overlap, duplication of efforts, resulting in funds being too fragmented. Join forces with other ventures, to coordinate efforts if not entirely merging organizations. Sanity check your plan by running it by people in the business world. Build a network, but also spend time on yourself so that you can approach your work from a stance of compassion, not anger/indignation.

Amber Nystrom

This is an exciting time of creating new models, new paths. Silicon Valley is a place that it's coming together because of 4 factors:

1. Technical innovation
   
2. Business innovation
   
3. Social consciousness
   
4. Dot-commers: young people, some with capital, who have tasted success and aren't afraid to shake things up
   

Focus on the bridges between profit and not-for-profit; fragmented capital is starting to consolidate, and traditional large players are viewing the space as an acceptable place to consider investing.
Get a mentor, someone who can help you on personal growth as well as social venture issues.

Experiences in ventures

This is more a grab bag of interesting anecdotes and facts that people mentioned as asides.

• According to Judy Koch, research has shown that parents reading aloud to children is one of the key indicators of academic success. The hearing vocabulary in kindergarten for children from different economic classes varies widely:
  
  
  • Lower: 3,000 words
    
  • Middle: 20,000 words
    
  • Upper: 90,000 words [That seems unlikely to me. -SPK]
  
  
• According to Steve Leventhal, there's an 85% annual turnover in logistics support in the humanitarian sector. There's no certification, little training, and no organizational learning or sharing. Measuring, rather than making people feel that they're under the gun, really helps people see the difference they're making or where they can improve, and improves satisfaction overall.
  
• Amber Nystrom listed lots of financial organizations that are either in or getting into the space, including:
  
  
  • Venture funds: New Schools, Acumen, Calvert, Thrive Capital, Expansion Capital
    
  • Pension funds: Those in Europe have changed their benchmarks to factor in social responsibility. CALPERS is also looking at double bottom-line.
    
  • Debt financing for Microcredit: Blue Orchard, Developing Market Finance
    
  • Foundations using socially responsible investing: Omidyar Networks, Rockefeller, Skool, Hewlett, Goldman, Lemelson, Atlantic