Social Entrepreneurship

In my previous two blog posts I have updated people on my venture and attached links that correlate to my post. Again my venture has evolved. I think I am going to do a do a 180 turn and head back into the boating segment. I agreed with feedback that introducing this as a vocational program might have negative feedback.

My current elevator pitch:

Built to order high power luxury speedboats built to order. Create partnerships with South Florida teen programs. Designate times to teach skills and allow teens to participate in builds. Exposure to industry practice and specialist expertise will help misguided teens to find career paths as well as teach communication and team work skills.

Feedback is always appreciated.

I have begun research on luxury product social ventures but have had difficulty as luxury products require large amounts of capital.

In other thoughts, I am a consistent reader of business books and magazines. The theme of selecting and building the right team for your venture is always recurring in conversation about entrepreneurship. After doing a little reading about the topic I did a little hunting on the web. Bellow are a few interesting links about building the right team.

Building Teams
Building Your Team
5 Strategies

Nate 

Entrepreneurship and teamwork

In searching for something good to talk about this week, I decided to search the phrase "be the best entrepreneur ever." Can't beat that, right?

I expected a bunch of silly fluff, but instead found an article called What's an Entrepreneur? The Best Answer Ever written by Eric Schurenberg for Inc.com. Schurenberg fishes up a decades-old quotation from Howard Stevenson of Harvard Business School:

Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.

Through Schurenberg, Stevenson explains that entrepreneurs are likely to start from humble beginnings not because those with small bank accounts are more willing to take risks, but because they are accustomed to making something out of nothing.

Schurenberg also comments that "When you don’t have the cash to boss people around, like in a corporation, you have to create a more horizontal organization." We've talked a lot in class about how having a good team is more instrumental to success than having a good idea. A good team is skilled and works well together, and a good idea is something for which people (or experts) can forecast value. But what keeps any team working on an idea?

I think the glue between team and idea is shared passion. Team and idea can only get you so far before water-treading and disenchantment set in. This seems another feather in the cap of entrepreneurship. Because immediate rewards are often low, collaborators tend to get on board only if they truly believe in the project: "The pursuit of opportunity without regard to resources."

This semester, I've been lucky to draw a collaborator who believes in my project and an independent-study advisor who happens to be building his career on the theme of online idea-sharing that we're exploring. I think back to all the times I tried to float a project without anybody jumping on board, and realize it had less to do with their skill or my foresight, and more to do with their interest before I even opened my mouth.

I'm no expert at this point, but here are my two cents: For all the great things you can say about your idea, its feasibility, and the prowess of those already on board, what really matters most in your pitch is that you show how much you love your idea, and that you find someone else who is ready to latch onto that spark.

Love it first, choose your audience second, and prove it third. With just a little luck, you'll find a friend in battle. I hope. :)

How Dell Has Reinvented Itself

A successful company just doesn't sit on the "fruits of its labor". Successful companies are never satisfied with their achievements; they are always trying to improve because there are always competitors ready to move in. The buyer utility map and six stages of the buyer experience are good frameworks to assess a company's offering and how they are perceived in the eyes of a buyer. The mix-and-match of utility levers and stages is a very creative way to increase the value of one's offering. In recent years, Dell Inc. has used this concept to reinvent itself and the way it provides customer service.

http://www.fastcompany.com/1768894/dell-reinvention-update

In May 2010, Dell formed a Customer Advisory Panel (DellCAP) to improve its customer experience by leveraging the power of social media. Dell realized that its customer support was falling short of expectations; customers were waiting too long for an agent and many support issues were left unanswered. In an effort to shorten the response time and quality of service, Dell has incorporated Twitter into its customer support. Now, customers can go on Twitter, voice their concerns, and receive immediate feedback. Dell is hoping to simplify the customer support experience so that they can improve customer productivity (i.e. give them more time to do other things).

My only concern with this method of customer support is Twitter's limited character content. Unless the issue is extremely simple, I can't see Dell customer service agents resolving computing issues in less than 140 characters. Overall, I think that this is a very creative and unique way of providing customer service. It's definitely a business model that can evolve with the growing social media industry. Dell's incorporation of social media into its business is a great example of how companies should look for different ways to capitalize on the different utility levers or stages of the buyer's experience.  How can your social venture exploit the six utility levers and six stages of the buyer experience?

China Philanthropy: A Blog of Social Venture Group

As I was doing further research into tobacco use in China and seeing if there were already previously established advocacy groups or nonprofits dedicated to reducing tobacco consumption, I stumbled upon this outstanding website called China Philanthropy: A Blog of Social Venture Group.

Social Venture Group (for those who like myself had never heard of them) is a team whose mission is to: "multiply the impact of philanthropy to China by 1) increasing the efficiency and transparency of charitable giving; 2) building a community of generous, committed donors; 3) fostering a healthier social sector." The group has provided assistance and consulted a wide range of nonprofits, corporations, and individuals who wish to provide goods and services at the grassroots level in China.

Besides its actual ground work, Social Venture Group also runs the China Philanthropy blog I originally stumbled upon and mentioned above. This blog is the real reason for my post today. First, directly pertaining to my social venture, I found an interesting article from October 2011 on how and why tobacco usage continues to grow in China. Besides many of the facts I have mentioned before, the post (link below) also makes reference to the role cultural norms play in the prevalence of cigarette usage in the country. I was shocked to find out that at least 100 schools were funded by the tobacco industry and tobacco names, slogans, and promotions often appear around these schools. Apparently one slogan on a gate of a school read "Genius comes from hard work- Tobacco helps you become talented."

This concept of social norms and cultural influences seems to be a huge part of what my social venture will have to address when working on an awareness campaign for smoking prevention in China. While this topic is something we briefly touched upon in class, I don't think I really understood its ramifications until reading this article today. I am sure some of the rest of you might find similar problems or issues in your areas of innovation, so I do hope this article will be of some help/interest to you. Also after spending some more time on the blog site, I have seen many interesting articles pertaining to multiple different fields. While in general the articles are based on experiences in China, I am sure many are applicable to other countries or situations. The links for my specific article as well as the social venture groups website are below.

http://blog.socialventuregroup.com/svg/2011/10/tobacco-use-continues-to-grow-in-china.html#more

http://www.socialventuregroup.com/index.php?option=com_frontpage&Itemid=1

Ownership Dilution

There is a difference between raising capital and raising the right type of capital. This is something every entrepreneur needs to be mindful of when searching for investors. Although raising capital is critical to funding a successful venture, how much ownership should one be willing to give up in return?

Typically, investors exchange cash for equity ownership. For example, let's assume that you hold 100 shares of your company which is equivalent to 100% ownership. If you were to provide an additional 100 shares of your company in exchange for seed capital, then your equity stake would be diluted down to 50%. After numerous rounds of funding you might be left with only a very small percentage of your own company.

Bottom line - raising capital is important, but maintaining control and sharing in the upside of your own venture is paramount.

Here is a brief explanation of dilution provided by Frank Demmler, Professor of Entrepreneurship at Carnegie Mellon Tepper School of Business:

http://www.andrew.cmu.edu/user/fd0n/51%20Anti-dilution%20protection.htm

An open source platform for mobile messaging already used in 80 countries

http://www.frontlinesms.com/about-us/history-and-support/

Fellow students,
Please check this out and see applicability to some of your projects,
Sangeeta

A feasible solution aimed at illiteracy/innumeracy

http://challenge.bfi.org/2011Finalist_TARAAkshar

For classmates interested in implementing solutions for illiteracy/innumeracy in low resource settings, here is a social venture with a similar aim,
Sangeeta

Conflict of Interest:

Vying for Capital as  Social Entrepreneur

          Social entrepreneurs face inherent challenges in assessing and pursuing their ventures in an environment which promotes private, for-profit ventures. Such ventures typically produce more substantial returns for investors and are thus generally more palatable to all but those particularly interested in social innovation or philanthropy. As I have begun the process of evaluating the feasibility of my own project, World Reader, I can't help but feel I would be met with a cool reception when it came time to face my hypothetical investors. 

         In one respect, a social venture could relatively easily achieve the principle pillar of success:  adding significant value to a customer or end-user. Additionally, social ventures solve significant problems and address dire needs. The venture could also be dynamically different and enjoy competitive advantage over other goods or services available. The issue is that the individuals who benefit are not willing (or able, frankly) to pay a premium price for the goods and services rendered. This makes the good or service unlikely to provide a margin or posses moneymaking characteristics even if the market for the product is robust. These shortfalls make it improbable that the good or service would be viewed as an investment with a good balance between risk and reward. 

          The overall positioning of a product like my proposed World Reader feels uncertain due to its inherent social nature. There is obviously a market for a product (the 785 million illiterate individuals highly concentrated in several countries). It offers a competitive advantage over other means of literacy promotion because it doesn't require a human and financial capital intensive physical teacher. The value creation could be immense; as I go about performing research on costs of illiteracy (social and economic) even marginal reductions could prove beneficial for these largely undeveloped, under-served nations. The reward is philosophically palatable, and now is as good a time as any to combat illiteracy particularly as we increasingly become a global economy motivated by technological innovations that will leave illiterate  populations even more disenfranchised. However, the risks of both the mission of the product (illiterate don't care to learn to read, self guided methods are ineffective, etc.) mount on the inherent risks to investors (losing their money) to make the bottom line even less certain. How does one engineer a devoted social venture that is desirable to more than merely philanthropic investors?

Customer Productivity: The key to a "winning business idea"

This week's reading on "Knowing a Winning Business Idea When You See One" is very interesting and useful.

It surprises me how many innovative ideas there are out there that don't take into consideration what this article deems to be the "most commonly used," but "least obvious" lever of utility - that is customer productivity. The idea has been increasingly emerging when examining social innovation success stories. A great example is the SMS crop service for Indian farmers deployed by Thomson Reuteurs. This service brings commodity prices, crop, and weather data at a farmer's fingertips. Having this information truly enhances the farmers'  [customers'] productivity so they can make conscientious harvesting decisions, not rotate crops when it could be detrimental to soil fertility, etc. Furthermore, I was surprised to learn that this is so low-cost that three months of information sharing via SMS is approximately the same price as a Starbucks latte in the United States!

Another point this article highlights is the need for a greater volume as the nature of the goods becomes more "knowledge-intensive." In the case of this SMS crop service, there is more definitely more value if more people are using it. But this rests on the customer productivity foundation. More people will use it if they are convinced that it will enhance productivity.

Here is a link to the video explaining the SMS crop service: http://careers.thomsonreuters.com/#/?hero=732305%7C%7C%7C%7C

Education

As I think about how to refine the elevator pitch I am also thinking about refining the concept, tweaking it for relevance.  I read this article about education in the developing world.  Our concept of education versus what is relevant for non schooled youth who want an income. Thinking about numeracy as my focus rather than a combination of numeracy and literacy.  Education is the way out of poverty but so to is knowing how to handle and discuss numbers particularly relating to financial literacy. Maybe the numerical aspect will entice those who would benefit to want to use the application  more.

The Stanford Social Innovation Review has pretty interesting articles.

Naming Your Startup

As we are all more firmly settling on our venture ideas, I thought this article on how to name your startup pretty relevant. I remember one or two students in the class already had a clever title for the venture; however, I figured a few, including myself, could utilize this article to begin brainstorming ideas. Also the book mentioned in the article, 22 Immutable Laws of Branding, looks interesting.

My favorite tip: "Can they remember it?"

http://under30ceo.com/13-tips-to-naming-your-startup/

Neat summary of Creative Commons

Here is a great video by Jesse Dylan at CreativeCommons.org that neatly summarizes the reasons behind Creative Commons and the motivations for using them in your own work:

http://creativecommons.org/videos/a-shared-culture

The focus is on art and music, but it is no great leap of imagination to see how other areas of enterprise could also benefit.

Engaging Stakeholders in the Creative Process + The Value of Fun

One key insight that stuck with me from last week's readings is the fact that stakeholders, especially potential funders, appreciate feeling needed and helpful in the creative process. While, from a distance and in the abstract, this seems rather obvious, it is much harder to accomplish as an entrpreneur in action. This recommendation to engage and partner with others in the process is also mentioned in this week's readings as one of the important steps to building a lasting business model (SAP did this well by acquiring firms that complimented their skills).

Another, similar insight from this week's reading is that innovation can sometimes simply mean making a part of a product or service (its purchase, use, or disposal) more fun (among other such improvements). A contemporary example is Volkswagen's 'Fun theory' experiment on the simple service of stairs versus escalators. People seem to generally choose things that are fun over boring or ordinary alternatives.

I see these two points being intertwined: engaging stakeholders in the creative process and leveraging the value of fun. Perhaps the greatest evidence of these being a successful mix for aspiring entrepreneurs is the crowd-funding trend led by Rocket Hub. Who knew that funding a venture, anything from a dance performance to a video game, could be so much fun? Crowdfunding brings together the engagement in the creative process, the social dimension of belonging to a group with similar passions, and the fun of seeing the project take off from someone's garage to the New York Times.

I am reflecting on how to integrate this cool trend and the need for stakeholder involvement and fun into my idea. I think it's a salient lesson for all of us. Let me know if you have any interesting ideas on how to do this!

Continued Research

After doing more online research, I've had a strangely difficult time finding out about indigenous cultures that are extra aquatic... so I've decided to spend my time pursuing the other half of the same venture. I have been researching south florida and its extensive history in boat building and toying with the concept of some sort of partnership with a manufacturer to source materials and or instructors.

South Florida has hundreds of boat manufacturers of all kinds and is known for it. In linking students with professionals we can build relationships as well as knowledge.

Below there is a great link with a couple articles about some high school students responses to building wooden boats as an extracurricular activity.

Elevator Pitch: High school students in south Florida will come together in an elective class to build boats with industry professionals, teaching team work, communication skills, and a trade skill. Once built the boats will be shipped in sets to river based cultures in countries around the world.

List of Florida Boat Builders
High School Boat Build

Effective Presentations: Less is More

Two of the biggest lessons I learned from last week's lectures were: (1) Pitching upside-down and (2) the 10/20/30 Rule. Dr. Millie Myer made a great point in pitching upside-down- when you have only 30 seconds, you need to start with the main idea and work down from there. Similarly, the 10/20/30 Rule provides a good framework for presenters to be concise, effective, and convincing. Like many of you, I've seen my fair share of presentations. The ones that were most entertaining and captivating to me weren't the ones with the most information or the ones with the most slides; rather, the presentations that intrigued me were short and simple. A bi-product of these presentations' success is the presenter; more often than not, I found myself convinced (not from the presentation but) through the series of stories and analogies provided by the presenter.

I found an interesting article from Inc. that gives tips on how to fix your presentations. The advice/tips are not earth shattering, but the author provides a really good example of their application. I've always believed that short, concise, and text-free presentations were the best ones. But from my experience here at Heinz College, most of the student presentations are inundated with words and unnecessary information. I can't stand this! I've tried the simple presentation approach and received negative feedback; I've tried the extensive presentation approach and received great feedback. Based on my idea of a great presentation, this is counterintuitive.

What is your idea of an effective (i.e. a good) presentation? What are your experiences with giving long, complex presentations as compared to short, simple ones? How was the presentation received?

Africa's Chance to Leapfrog the West

Last Thursday, Amy and I, along with a few other CMU students, were given the opportunity to have lunch with the World Bank President. Mr. Robert Zoellick. While my initial impression of the World Bank was just that, it is a bank that loans money to various countries, we also learned that the World Bank engages in disseminating innovative knowledge sharing. And surprisingly, not all of this innovative knowledge is transferred from the developed nations to the developing. In fact, certain countries have taken already developed platforms in the West, and had a field day customizing it to their needs. While Mr. Zoellick was primarily talking about projects like M-Pesa, I came across an article in the Harvard Business Review, called "Africa's Chance to Leapfrog the West", that took this concept to a whole new level.

http://blogs.hbr.org/cs/2012/02/africas_leapfrogging_opportuni.html

Briefly, the article points out that in places like Africa that lack legacy infrastructure, "there is an opportunity for a genuinely transformative, future-friendly reconceptualization of the very notion of infrastructure".
The author discusses the concept of Leapfrogging, a hypothesis (based on Joseph Schumpeter's notion of ‘gales of creative destruction’) which proposes that companies holding monopolies based on incumbent technologies have less incentive to innovate than potential rivals, and therefore they eventually lose their technological leadership role when new radical technological innovations are adopted by new firms which are ready to take the risks [Wikipedia "Leapfrogging"], with respect to technologies like cloud computing, social media, etc. These have resulted in an increased opportunity for Africans, as well as the notion of achieving more with less when compared to their Western counterparts.

However, as with all new technologies, it is not as simple as it seems. Leapfrogging is just the means, and not the end. So, it is up to the entrepreneurs and innovators to use these set of tools and techniques within the constraints of the country's culture, social norms, etc., and transform Africa with "one entrepreneurial triumph after another".

~ Ketaki

Africa Innovation Hubs

I thought I would share this article about governments in African countries and the promotion of tech innovation.

http://afrinnovator.com/blog/2012/02/10/the-role-of-government-in-promoting-tech-innovation-in-africa/

The capacity of African tech entrepreneurs is really incredible and there is lots of innovation coming out of the continent. Although no one can deny the importance of a governments role in tech innovation. There are fortunately some African countries that with forward thinking leaders, fostering innovation in those countries. Unfortunately many countries do not, stifling tech innovation and widening the digital divide.

I found it interesting how the article talked about the importance of incubation hubs. Places where young entrepreneurial thinkers can go, get mentored and really become empowered as to the type of impact they can make in their countries. Here are some links to some of the hubs.

1. iHub - http://ihub.co.ke/pages/home.php
2. activespaces - http://activspaces.com/
3. Co-creation Hub - http://www.cchubnigeria.com/
4. BongoHive - http://bongohive.com/

These hubs really have become the center of innovation in African communities, they do a great job of taking advantage of local capacity. Goverments are in turn increasinlgy starting to realize the importance of the hubs for building technolgies that are contextual to the citizens of thier countires. As I am sure we all know "Necessity is the mother of invention” with the way the digital dividing is becoming wider and wider and western communities advancing technologically, these hubs serve the purpose to make up what these communities lack and that is an entrepreneurial spirit where people of communities, are building for their communities.

Ketaki brings up an interesting idea in her blog post on Africa Leapfrogging the West. As many ICT4D initiatives fail, western communities are starting to realize that forms of technology and interaction that work in western communities won't necessarily work in Africa. That because of the different context, which is really where the African entrepreneurial spirit gets to shine.

I feel as if these innovation hubs can serve has a very important bridge between Western and African Communities. Western organizations I feel have and resources and and African communities have the indigenous knowledge. This serves has a healthy tension, because bridging both types of services can bring the maximum amount of impact to the community.

Dell Social Innovation Challenge

Anyone can apply for this relatively easily, takes about a couple of hours for the application. And even though I just realized that today is the deadline, i though i should share it with the class. Once you have the required fields filled in, you can continue to edit the content till the end of the challenge!!

http://www.dellchallenge.org/

Good luck,
Ketaki

A 'sound' idea for Marcel and Cynthia

http://blogs.independent.co.uk/2012/02/09/books-with-soundtracks-no-really-this-one-works/

I read this today and it reminded me of Marcel's idea for books to address adult illiteracy
and Cynthia's idea of mobile app to teach basic math and reading to underprivileged children.

Invest in Management or Concept?

In class we have briefly discussed the various mindsets behind investors. Venture capitalists and private equity firms only provide funding to a very small percentage of entrepreneurs - typically in the single digits. While having the right management team and having an innovative concept usually complement each other as the optimal strategy, most investment firms will put more weight on one or the other. The question is - how do we know which one is more important and what can we do about it?

The answer is: it depends.

The intuitive answer is to hedge your bet. Be able to sufficiently cover both areas in order for the potential investor to be comfortable that you have the right team with a strong business plan. I personally believe that unless the venture concept is an absolute home-run, more emphasis should be put on proving that your experience and expertise are the foundation of your business. Furthermore, the superior abilities of your management team are ultimately what will make your venture successful and that the investor should be investing in YOU first and foremost.

Again, this is a very subjective topic and one could argue that markets are efficient, consisting of other talented individuals, in which one's venture is not worth the investment unless it is truly unique. It will be imperative for all of us to identify the strengths and weaknesses of not only our concepts, but also the people behind our ideas. In order to effectively raise capital, it will be essential to prove why we are the right people to execute our ventures.

Additional resources from the Donald H. Jones Center for Entrepreneurship at the Tepper School of Business:

http://tepper.cmu.edu/faculty-research/research-centers/donald-h-jones-center-for-entrepreneurship/resources-for-entrepreneurs-and-venture-capitalists/carnegie-mellon/index.aspx

http://tepper.cmu.edu/faculty-research/research-centers/donald-h-jones-center-for-entrepreneurship/resources-for-entrepreneurs-and-venture-capitalists/pittsburgh-entrepreneurship-supporters/index.aspx

CEMLA, MIF/IDB and World Bank Launch enviacentroamerica.org To Make Costs and Conditions of Remittances More Transparent

I just came across this article, and thought it might be interesting (and/or useful) for the Diaspora Connect Project -

http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:23106029~pagePK:34370~piPK:34424~theSitePK:4607,00.html

http://www.good.is/post/is-the-social-enterprise-bubble-about-to-burst/

Hi,
This is a great article that brings together 5 different people who run social venture projects in Africa. It gives one perspective about the role of social enterprises within the development sector in emerging economies. I specially like the last paragraph where they give advice to would-be social entrepreneurs.

Winning pitch of MIT''s 100K competition 2011 in their emerging markets category

http://www.youtube.com/watch?v=Snyw3xGHpuQ&feature=related

I came across this example of a successful pitch of a business plan conceived and executed by a team. Many of you have already participated in sessions like these at CMU which I could not attend. I'm learning something new in each session, from each of you in class.

Project Rwanda CMU 2010

In last weeks class, we had a great discussion regarding the features of the One Laptop per Child technology. Below is the video from my trip to Kigali,Rwanda in May 2010.

Our team helped teach music, programming, and acting to fifth grade primary school students. It was a great experience and we learned a lot -- including being sensitive in utilizing a technology and aware of the fact that we may be imposing on an education system that is already effective. We prioritized getting to know the students and centering our lesson plans around their interests as well as teaching methods that they were already accustomed to -- i.e. group discussions, competitive tasks, games that they enjoyed etc.

We experience the frequent technical shortfalls of the laptops first hand -- mouse pads failing to after dust collection, speakers turning on and off, etc. but interestingly, we also got a sense of the students' strong desire to fix glitches and advance using the technology on their own.

Innovation in Braddock, PA

As someone whose family has long been located in Pittsburgh, I am fascinated by the area and its history. My time at CMU has only increased my interest in the region. Ironically, I was recently reminded of an extremely innovative person in Pittsburgh who is greatly improving the lives of Braddock citizens with his new policies and programs including green jobs, artistic endeavors, and youth employment. Last year Heinz had this man, Mayor of Braddock John Fetterman, come speak at one of our convocations. For those of you who did not have the opportunity to hear him speak, he told a riveting story of why and how he became involved in Braddock and what steps he has taken to revitalize one of the poorest areas in Pennsylvania.

In looking for some inspiration for a social venture of my own, I visited Braddock on Friday to see the revitalization efforts first hand. I also reread Fetterman's story of Braddock (link below). While what Fetterman is doing in Braddock may not directly relate to any of the projects we choose to pursue this semester, I thought sharing the story with everyone would remind us that one person can make a huge impact on the world around them. A good notion to remember at the beginning of a social venture... Enjoy!

http://monthlyreview.org/2008/12/01/braddock-pennsylvania-out-of-the-furnace-and-into-the-fire

Thinking about possibilities

 For quite a long time I have thought about what very simply I could do to make things better. While working for established organizations I’ve had to, for better or worse, mind the store.  When that gets stale the choices are to do nothing, accept it for what it is, or make a change.

For me this course is about making a change.

I can across this pbs page about people who have made a change. Maybe some have seen either the documentary or the page itself, from 2005. The video is no longer available but the information is relevant for me. Maybe for others as well.

    http://www.pbs.org/opb/thenewheroes/whatis/

http://www.pbs.org/opb/thenewheroes/whatis/

Cynthia

The Audacity of Entrepreneurship

The Audacity of Entrepreneurship

          After hearing and discussing everyone's pitches last class I was compelled to do some reflection on the subject of attitude and its ultimate impact on the success or failure of an entrepreneurial venture. More specifically, on the ability for a venture to garner support. Our class was almost unanimously thoughtful, modest, and deliberate in the presentation of their ideas and passions. Everyone seemed open and receptive to questions and constructive criticism, as well. In another entrepreneurship course I am presently taking this was not the case.
          More specifically, every member of the class was placed on a team of other students to generate and pitch an entrepreneurial venture. I missed my group's initial brainstorming session due to illness and was unpleasantly surprised by the initial set of ideas that had been generated. They were the product of one student's interests and passions in particular and no credence had been given to even basic feasibility assessment: was there demand for these products or services, who was the target audience, what problem did they solve, what sort of financial capital would be needed at start up, etc.
          To my surprise the student who generated the primary idea (which the other team members supported) was taken aback when I asserted the store he proposed would cater to a niche and diminishing market and compete in a larger market that is completely saturated. The business model was not sound, the business itself would be extremely capital intensive, and its revenue streams were questionable. However, of all the people I have spoken with or heard a "pitch" from this semester, this student was the most certain and steadfast the business was a "good" idea. His confidence (unfounded as it was) was convincing enough our group mates backed him almost without question.
          Would this attitude ultimately lend itself to success in entrepreneurship? In terms of an idea getting off the ground I think attitude plays more of a role than I had originally given it credit for. More specifically, immovable confidence and certainty. I thought a good idea would stand on its own two feet almost regardless of who it came from, and an awful one would be transparent also without credence for its source or how the source felt about the matter. I don't propose self doubt or crippling worry and uncertainty as an infallible alternative to this person's baseless cockiness, but I would at least suggest thoughtfulness and an iota of due diligence through market research before throwing your support behind a venture. To him this was crazy talk, and to him our group's support was evidence of the idea's viability. I think if the group was legitimately investing their own money, however, many of the questions I raised would have come front and center much sooner.

Brad Myers' Recent IP Lecture

Hi everyone,

I attended professor Brad Myers' lecture on intellectual property last week and thought you might be interested in some of the basic information he provided about IP and more specifically patents. If you have been wondering how the system works, or perhaps how to protect your own work from competition, professor Myers' points may be useful.

Myers distinguishes between four kinds of intellectual property: copyrights, trademarks, trade secrets, and patents:

1. A copyright provides exclusive rights to an exact, original expression for a limited time. They are assigned freely and automatically for all works, can be registered, and apply to books, code, icons, and things with form and substance--not ideas or information.
2. Trademarks identify a commercial product to avoid confusion. They never expire and can be used for words, icons, or even colors. TM, (R), and SM are varieties of trademark.
3. Trade secrets need not be disclosed (of course) until a patent is issued. These may include plans, marketing analyses, and algorithms. If it's covered by a non disclosure agreement, it probably has something to do with trade secrets.
4. A patent provides exclusive rights to an invention for a limited time--in the US, 20 years from issue. Internationally, patents are reviewed and issued based on a "first to file" rule. The US used to be "first to invent," but the recent America Invents Act erased that and instituted the same policy followed by the rest of the world. Patents often cost more to acquire than the profit they wind up making. It can cost $20,000 or more to patent an invention domestically, and possibly as much as $100,000 for international patents. Patents must be "novel and nonobvious to a relevant tradesperson," "useful," and "properly disclosed for possible reproduction." (See http://caselaw.lp.findlaw.com/data/constitution/article01/39.html) There are provisional patents one can get through an academic institution, which cost a mere $125, but this may not apply for the purposes of our class.

An overarching point of the talk was that patents are highly competitive and constantly challenged by federal courts, the International Trade Commission, and frequent reexaminations by patent office workers. Open source licensing and creative commons offer alternatives--google CTTEC and nosoftwarepatents.com for more on this.

Best,

Russ

On Water

For my social venture, I have decided pursue boat building. After conducting some research on passed social ventures that have built boats I feel this will be a unique experience with powerful effects.

I am exploring the concept of hosting an education program for teens to take part in a real world boat building process. Students from high-schools in south florida will work together in collaboration with a number of boat manufacturing entities based in south florida to design and build watercraft. This concept seems realistic and very feasible to me.

Similarly, I am researching the use of water craft by indigenous tribes. Dugout boats are some of the most common hand crafted boats in the world. Cultures on rivers all over the world are known for using this type of boat for fishing, hunting, traveling, fighting, and trading. I plan to continue my research, identify a specific culture that has an unmet need within a marine life scope, and perhaps design a product that will be the solution to their unmet need. This project feels like there is a bit more disconnect between the end user and I.

Below are some links: one showing an article about a canoe building education program based in the bronx, the next showing a similar program based in canada, and the last is a wiki page briefly showing the history and use of dugout canoes in the world.

NYC Boat Building Social Venture
Youth Boat Works
Dugout Boats

I hope to hear some feedback on which direction people feel will be more opportunistic and effective.

Open Innovation

Our discussion the other day about the potential challenges and opportunities of open source innovation and collaboration made me think of a couple of Mckinsey Quarterly articles that came out last month: "Managing the Business Risks of Open Innovation" and "Wiring the Open Source Enterprise".

The key takeaway from these articles is the overwhelming trend towards open source innovation online and the fact that more traditional IP-oriented companies will either have to work harder to differentiate their 'core IP' or adapt to the model of more collaborative IP-free innovation. As we mentioned last session, the success of such efforts will depend on how users are motivated/incentivized and how strong the foundations are. The authors recommend a grassroots approach.

What I find most interesting is the analysis done on which industries will most likely adapt to and benefit from this new trend. The chart below provides some insight into a broad swath of different sectors possibly effected beyond just the obvious IT software development hub. I was actually surprised by what seem to me to be high-risk categories such as 'medical, precision and optical instruments' and 'coke, petroleum and nuclear fuel'.  These beg the questions: how would one balance open innovation, quality control, and security in such categories? Bob Lewis, CEO of Communications Consulting in South Africa commented:

"...If something is “open,” who takes ultimate responsibility for its shortfalls, especially in a climate where even operational computers at power stations have been hacked?"

 Perhaps this calls for an even more innovative process or model of responsibility-sharing to allow open source innovation to flourish in a safe and collaborative environment.

The chart below shows analysis based on the following three questions posed to industry leaders:

1. Do specialized firms offer proprietary solutions within certain layers of my industry’s value chain?
2. Do integrated firms seek to cut development costs in my industry by drawing on open technologies to substitute for these proprietary solutions?
3. Are the underlying technologies complex—consisting of so many bits and pieces that a significant number could inadvertently infringe on proprietary IP held by specialized firms?

Source: https://www.mckinseyquarterly.com/Managing_the_business_risks_of_open_innovation_2911

An Idea Without All the Answers

Last week, we talked a lot about innovation-where it comes from, is it feasible, what are the next steps, etc. Ideas (whether great or not) are generated constantly, but the execution of these ideas are equally important. In recent years, I've thought a lot about entrepreneurship and innovation. Many ideas come to mind, but none have been executed. I'm hesitant to pursue these ventures because I do not have a concrete or complete business plan put together. It's always a work in progress.

As an entrepreneur, do you need to have a concrete business plan before you pursue a venture? Or is it possible to sell (i.e. convince) strictly based on an idea and work on the business plan as you go along? At a recent networking event, a friend of mine (who has a start-up) says that you are always selling. I guess this implies that I should get out there with my idea and do it, even if I don't have all the answers.

Your thoughts? Your responses will definitely shed some light and motivation into my potential ventures.

-Tony Tran

Understanding your audience

While reading the Entrepreneurship section (Flipboard magazine), which by the way I highly recommend, I came across a couple of really interesting articles related to building your network & understanding your community.

Are you forgeting someone? - http://www.inc.com/matthew-shampine/community-building-for-your-company.html
Forget Networking. How to Be a Connector - http://www.entrepreneur.com/article/222707

While most people will constantly tell you that you cannot design a product without fully understanding your audience, it is something that does not come naturally to most of us, unless, we are ready to spend a few days living the lives of the people we hope to impact - like the 2 MIT graduates that spent a month living on the minimum wage set by the Indian government. But the biggest reason many good ideas never take off is because they do not entirely understand the community they are working to make better. The XO laptop is a great example. Yes, technology is wonderful, but these people lack the basic needs of food, water, shelter, etc, and unless children with laptops can somehow solve these problems, there is not much benefit to the community as a whole.

So how can one fix this issue? The two articles provide excellent solutions: 1) immerse yourself in the community that you think has some say in your product - make everyone feel that the product is something they can all benefit from and be open to a lot of constructive critisism. Several non-profit organizations have blogs/FB profile pages, where you can provide your suggestions to a problem they are trying to solve. Show people that you are genuinely interested in making a difference, and in turn, when you need some advice, it will be readily availble. And, 2) build your connections anywhere you go, because even if you have little idea about the cultures, social norms, trends, etc in a particular region, someone else might. And you never know what interaction, no matter how feeting, might spark a connection that would open up your mind of a completely new world of possibilities.

Most people speculate that even if you are not particularly keen on social media, it is here to stay. And I agree. Twitter, FaceBook, LinkedIn, etc. provide an excellent platform to build a community of like-minded individuals who can support your vision and also help promote it. Additionally, companies like Klout are using and evaluating your everday connections as a tool to create your SM worth in the market, much like your actual financial worth, and rewarding individuals with higher clout.

So, what do you think about the SM bandwagon? Are you already immersed within the communities you wish to impact? And do you any other ideas on making these valuable connections that we could all benefit from?

~ Ketaki Desai

Here's another social innovation bringing light to the poor

http://isanglitrongliwanag.org/

Please check this out and post your comments,
Thanks
Sangeeta

Innovative local group started by a former CMU grad - in response to Ketaki's project

http://thenewsexed.org/index.html

Hi all,
I've been following how this project has evolved in the past year or two. When Ketaki discussed her idea for peer-to-peer promise re: active intervention in case of sexual crimes, I was reminded of this. Founder Samantha Bushman is a former CMU Grad.
Sangeeta