Category Archives: Startup

The upside down organization

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 Sage advice from Joel Spolsky:

Think about how a university department organizes itself. There are professors at various ranks, who pretty much just do whatever the heck they want. Then there’s a department chairperson who, more often than not, got suckered into the role. The chairperson of the department might call meetings and adjudicate who teaches what class, but she certainly doesn’t tell the other professors what research to do, or when to hold office hours, or what to write or think.

That’s the way it has to work in a knowledge organization. You don’t build a startup with one big gigantic brain on the top, and a bunch of lesser brains obeying orders down below. You try to get everyone to have a gigantic brain in their area, and you provide a minimum amount of administrative support to keep them humming along. 

Theory of the business and theory of change

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In my previous post on “Building a theory of change or an organisation that creates change” I talked about successful businessmen who in Philanthropy to support an organisation that creates change rather than specific programs that support a theory of change in a complex social environment that is constantly changing.

On further thinking, I think there is a role for both. In essence, Organisations need support to build and expand their theory or what Drucker would call the “Theory of the Business (PDF)” and each program would have in effect a “theory of change” even if its just a hypothesis.

Duncan Curtis suggested that the The Science of Entrepreneurship is:

So two things.

I think to build a great company you need to have a well defined hypothesis based on a theory for a market’s evolved future.

And I think the most effective way to enter that market is to build a company like a scientist testing the theory. As an experiment.

An organisation like TACSI will need to experiment and find out what it takes to create and expand the “theory of the business” around social innovation while a program/project like Family By Family needs to test and ensure that the original hypothesis driving the program or its theory of change will work in the future.

 

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John Wood and Room to Read

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From Knowledge@Wharton:

Wood devotes much of his book to explaining how he has modeled Room to Read on key features of Microsoft’s corporate culture. Noting that most nonprofits lack a hardline approach to managing costs and leveraging outcomes, Wood offers Room to Read as an example of how a well-run NGO should raise money, market its work and maximize results.

He is especially intent on data-driven accountability. For Wood, a successful nonprofit must answer to donors, who deserve to know where their money goes. He is careful to publicize Room to Read’s results continuously: Even his email signature file documents how many schools have been built, how many libraries have been established, how many books have been donated, and how many girls have received long-term scholarships to allow them to stay in school.

Moreover, for Wood, accountability doesn’t just satisfy existing donors — it creates new ones. An iconoclast when it comes to development, Wood doesn’t bother with direct mail campaigns or other standard trappings of non-profit fundraising. Instead, he relies on the human touch, travelling to fundraising parties organized by regional volunteers and convincing prospects, through an irresistable combination of personal charisma and a compelling business model, that their money will go places if they give it to him. This approach works with both individual donors — he once raised $150,000 in less than two minutes at a fundraising party when donors began matching one another’s gifts — and with foundations. One of Room to Read’s most generous and consistent funders is the Draper Richards Foundation, an offshoot of a firm run by renowned venture capitalists Bill Draper and Robin Richards Donohoe. Impressed by how Wood’s strong business sense had informed his non-profit mission, DRF finances Room to the Read to the tune of six figures a year.

Wood’s insight is simple, but transformative: Corporate savvy is not opposed to humanitarian aims, but may be used to assist them. Just because a charitable organization does not seek to make a profit, that doesn’t mean it shouldn’t bring in as much money as it can, and manage that money well. To do any less is to shortchange the organization’s mission. There is also a crucial correlative here for Wood: While donors deserve to know where their money goes, the organization should not accept money from sources that could try to dictate organization policy. For that reason, Wood told The New York Times, "We don’t seek government funding here in the U.S. We don’t want to get into a fight with the U.S. government over whether we are allowed to teach kids about condoms or AIDS."

An Indian Inventor Disrupts The Period Industry

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A great story from Fast Commpany’s Co-Design website on new products, vision, business model and fighting against all kinds of troubles. A typical entrepreneurial story.

When Arunachalam Muruganantham hit a wall in his research on creating a sanitary napkin for poor women, he decided to do what most men typically wouldn’t dream of. He wore one himself–for a whole week. Fashioning his own menstruating uterus by filling a bladder with goat’s blood, Muruganantham went about his life while wearing women’s underwear, occasionally squeezing the contraption to test out his latest iteration. It resulted in endless derision and almost destroyed his family. But no one is laughing at him anymore, as the sanitary napkin-making machine he went on to create is transforming the lives of rural women across India.

More on the company here.

Sanitary napkins manufacturing unit
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Making a dent in the universe

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Christen works as the Venture capital go to guy in The Australian Centre for Social Innovation where I work. He alerted me to the latest Forbes issue on social entrepreneurship, impact investing and using “patient capital” as a VC.

From Forbes profile and story on Jacqueline Novogratz, the CEO of Acumen Fund.

Novogratz plays the role of auditor because, as CEO and founder of the Acumen Fund, helping people starts with financial due diligence. In April Acumen sank $1.9 million into the bank in exchange for an 18% stake, one small investment in a decadelong experiment in charitable giving. Instead of shoveling aid dollars to causes or governments that give away life-­sustaining goods and services, Acumen espouses investing money wisely in small-time entrepreneurs in the developing world who strive to solve problems, from mosquito netting to bottled water to affordable housing. It’s a new twist on the old adage about teaching a man to fish, except that Novogratz wants to build an entire fish market.

Check out the whole story and it’s associated articles. When Steve Jobs talks about making a dent in the universe this is the kind of stuff which resonates with that statement. Writing this on the iPad I consider that stuff great too!

I think there is a serious lack of patient capital playing the social VC (social as not in twitter and facebook but social enterprises) game here in the Oceania region. This is something I will be exploring next year with my colleagues at TACSI.

You’ll be dead soon

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Steve Blank has an nice story on the importance of courage in the startup world. He points to the importance of reflecting on death that Steve Jobs talked about in his Stanford speech.

Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything – all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important.

Steve Jobs

Lessons Learned from Steve Blank:

  • Yes, premature scaling is a cause of startup death
  • Yes, you need to get out of the building and test your hypotheses
  • But, when an opportunity smacks you in the head for gosh sake grab it with both hands and don’t let go
  • If you can’t, get out of the startup game

    • Exploring the role of Entrepreneurship in the Social Sector

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    The troika of books that I am reading now for the startup stuff is Lean Start up by Eric Ries, The 4 steps to the Epiphany by Steve Blank and Business Model Generation lead by Alex Osterwalder.

    I have started out with the business model innovation stuff and best of all I am using the iPad app to create the business model for Family by Family. Like I said, I am entering the digital era and moving out from pre-digital.

    As I was reading the Lean StartUp, Eric starts with defining entrepreneurship as “The concept of entrepreneurship includes anyone who works within my definition of a startup: a human institution designed to create new products and services under conditions of extreme uncertainty.” This definitely makes sense and does not restrict first to tech only startups but to go beyond start ups. As he explains his work at Intuit, large and mature organisations and the managers who work there are extremely in the same situation as a start up, especially if they have read the Innovators Dilemma.

    Eric clarifies,

    “Anyone who is creating a new product or business under conditions of extreme uncertainty is an entrepreneur whether he or she knows it or not and whether working in a government agency, a venture-backed company, a nonprofit, or a decidedly for-profit company with financial investors”

    When I write about business in this blog, I always mean entrepreneurship. In the about pages, I talked about business by providing the definition of the entrepreneur that Drucker used. I discuss startups, write about them, read about them, started a couple and failed in them and am totally energized to work in one now. However, what I have done from the almost my early working days is trying to “to create new products and services under conditions of extreme uncertainty”.

    My first job was to sell the services of my organisation which was to design webpages on the internet. Year – 1998. Place – Hyderabad, India. This was before Hyderabad was a powerhouse with Google India HQ, the Indian School of Business etc. Ofcourse, this was when internet connections where 56kbps and the go to browser was Netscape. The challenge was so great that we had to actually ship a computer to a customer’s office to show a mock up web page on a 5 1/2 in floppy in monochrome colour. Don’t laugh!

    My next area of work was in financial services and investment banking outsourcing for investment banks like Goldman Sachs in ADP Wilco. The most exciting part for me was when we were setting up a new project. After 4 years, I left to work for Deeshaa. A real social enterprise trying to make a difference in rural India. And it continued into the government here, two failed startups, and now in Families SA and TACSI I have always worked and thrived in areas when I was creating new products and services under conditions of extreme uncertainty.

    Reading this I had the epiphany about my entrepreneurship journey as I saw my last 13 years of working life and decided that will be the tag line for this blog, the headline in LinkedIn and clearly what I am doing now and will continue to do for the foreseeable future.