Using social media

Blogging is something that is far outside my comfort level.  As I thought about what to include for last week I kept thinking I have nothing to say.  Rather, I had nothing to say that I wanted to be read publicly.  I think about blogs as journals; only to be read after I die or am offered an obscene amount of money for my memoirs.     So, forcing myself to overcome this discomfort and general aversion to living life out loud...

The article "The One Thing You Must Get Right When Building a Brand" suggests using social media for insight.   This makes sense to me particularly because I don't use it now for the same purposes as many other people do.  I check my social media accounts only to see what people are discussing rather than post any updates.  The insight of what people's needs are, particularly related to how technology is used for general education, can potentially be good conversation starters in building a market, positioning, and, in continually revising the pitch.

The complement of that however is to use social media to make the case and continue the conversation about why I think my idea is a good idea that can help bridge a divide.  Using it but not overusing it to the exclusion of other marketing tools and likewise not ignoring social media in the effort to establish a market may be a delicate dance. Much like my own comfort level dance.

Service, a gateway drug for social entrepreneurship

I recently came upon this article on Twitter, the tweet said "Service, a gateway drug for social entrepreneurship." The tweet didn't make sense to me at first, but as I started to read the article, the idea came together. The article starts off with the story of a bright young mind who traded in his $80,000 a year job to do service in Haiti, very inspiring indeed. But what really got my attention in this article was how this young man used his experience in Haiti has an opportunity to think about a social venture concept. He actually put himself into a situation where he could get a first hand look for the problem and went on to innovate from there. Innovation can come from the most unexpected place, and doing service in an area that interests you is a great place to start.

This was a process that I personally connected with. It was  a trip to Tanzania two years ago that really shifted my thoughts about technology in emerging markets and it is an experience that is still fueling my drive to see entrepreneurship and innovation in Africa. I was working with my professor and a group of engineers from my undergraduate university to install computers in rural Tanzanian primary schools. From this experience I was able to realize issues with sustainably implementing technologies in underserved communities, but more importantly I was inspired by the motivation of the youth to use these technologies.  We had youth volunteering their time outside of school to learn how to use these computers, youth (literally) running towards me when I had a camera or mobile phone in my hand. Technologies I feel we take fro granted really excited these children. It was this experience that inspired to want to create a social venture for youth, that really leveraged their capacities.

I don't know if anyone else in the class had a similar experience but I feel the process of using service has an opportunity to  I feel as if this process is something that we can all something from as we think about our social ventures.

Article can be found here:
http://www.fastcoexist.com/1679373/fostering-the-next-generation-of-social-entrepreneurs-through-service

When choosing a country to do a startup

 I came upon this article recently that talking about choosing a country in Africa to pilot your startup. I instantly connected with the article because in my conversation with different people about social entrepreneurship, I've heard many people say that they want to do a start up in Africa. As we all know Africa is continent of cultural, social, and economic diversity, no two countries are the same. So when choosing a country to pilot your project it seems difficult to choose. You could pick a country out of a hat, but their is a systematic process one can take when choosing a country. I like how this article lays out a decision framework for choosing the best country to pilot your startup. Although the article talked about specifically African countries, I feel as if this decision framework could be applied to developing countries around the world.

This article does a very good job of really going beyond surface level factors when choosing a country to conduct you startup. In Africa, countries such has Kenya, Nigeria and South Africa seem to get all of the attention. Although it seems as countries such has Somalia and the DRC that face horrific human rights violations are brutally overlooked. Not only countries within Africa but emerging markets in the Caribbean, Latin American and South-East Asia that do not see innovation on the same scale as Africa.  In all what the article does is create an opportunity to think outside of the box when launching your social venture. It gives your a holistic framework in assessing the the viability of your social venture in particular countries.

I especially like the paragraph about "Being Global" it's a great opportunity to think about how your social venture can scale to communities across the world to make impact. M-Pesa is a great example because not only is it an innovative technology that a market is being created around, it's a technology that takes into account the unique contextual requirements of people of the society, Kenyans. Most Kenyans may not have access to computers, but they have access to phones. The creators of M-Pesa took into account the increasing mobile penetration rate of Kenyans, which is why m-pesa is so successful.

The article can be found here : http://afrinnovator.com/blog/2012/01/18/which-african-country-is-best-to-do-a-tech-startup-a-decision-framework/

Positioning

A portion of the recent readings focused on positioning. Positioning is one of my favorite subjects of marketing. Below I have placed a link for a book titled 'Positioning: The Battle for Your Mind'. Its a really simple and insightful read.

A section of the book focuses on the concept of metaphorically comparing the consumers mind to a ladder. The point would be to position your business on the top rung of the ladder, and maintain that position. The book goes further to explain that there is one ladder in the mind for every industry or sector of products, so the optimal approach is to pioneer a new industry or sector. Its easy to move down the ladder, not so easy to move up the ladder.

Below, I have also attached a link to the Entrepreneurship Encyclopedia definition of positioning. I have chosen to attach this because it clearly illustrates the preliminary actions and thoughts to deciding on a business position.

Positioning: The Battle for Your Mind
Positioning in the Encyclopedia

Enjoy!
Nate

A link to a classic story about entrepreneurship

http://www.sinden.org/verger.html
A friend mentioned this story in a different context. I think it really highlights how entrepreneurship has many dimensions and is not limited by geography, culture, education, wealth. Hope you enjoy reading it and are inspired by it, as I was.
When you identify an internal need, what you do may benefit more people than yourself. Desire+dissatisfaction= opportunity

Target Market --> Penetrated Market

I thought this would be a good forum to elaborate on what I referring to in class when calculating market penetration. The equation I referenced was (target market) x (awareness) x (purchase intent) x (all commodity volume: ACV).

Awareness represents the percentage of the target market expected to be aware of your product/service. This figure is usually based on the combination of various marketing techniques and ideally increases in the long-term. For example, let's suppose we are selling a new toy - the awareness calculation for the first year could be as follows:

Awareness (Year 1):

• PULL Strategies:
• Magazines/newspapers: 1.5%
• Events: 1.0%
• Online: 6.0%
• Transportation media: 0.5%
• Play centers: 0.5%
• Word of mouth: 0.5%
• PUSH Strategies:
• Public relations: 1.5%
• Point of purchase: 2.0%

• Awareness per segment:
• Children: 10%
• Parents: (18-65): 20%
• Grandparents: (65+): 8%

• Weighted awareness: 14%

Purchase intent represents the percentage of the target market that would likely purchase your product or service assuming they are aware that it exists. Similar to awareness, purchase intent would also need to be calculated by target segment.

ACV represents the proportion of the target segment that you would be able to physically reach in order to provide your product or service. This calculation may be harder to derive at first until having more color regarding your distribution, cost and capacity constraints.

Hope this was helpful. Clearly there are numerous other methods of calculating market penetration, but this is one technique that I found to be useful.

All commodity volume

Brand awareness

Intent scale translation

Anticipating the Challenges of Piloting A Social Venture

This week's readings about market segments, targets and positioning made me think about the complications of 'testing' a target market via a pilot for a potentially large-impact social venture. Once I've done the research and completed the feasibility plan for my 'Diaspora Connect' idea, I think the next step will be to partner with a technically capable group within the CMU community to build the tech platform to pilot the idea. Right now I can segment my market by national origin, age and occupation, average income, or frequency and size of remittances, among other characteristics. I can also segment based on the various values of the service: those who seek smaller fees, those who will be attracted by the social enterprise investments, those who are anti-corporate money transfers...etc.
Right now I envision the ideal target market as immigrants/residents/naturalized citizens who are professionally established (regardless of age) and frequently send significant amounts of money 'back home'. This brings up the first challenge - how do I identify this pocket of the population when the best source of this information would be Western Union, possibly my most daunting competitor? Next how do I ensure that the pilot 'does no harm' especially considering the inherent risks in international money transfer and financial management? I may be jumping the gun, as I am still in the research/feasibility phase, but it seems that a lot of foresight and reflection on these issues is necessary to successfully manage the expectations of one's target market and anticipate competitive response. Is anyone else having trouble with this? Thoughts? Advice?

"Positioning" the Friend a Farmer Fair Trade Cart

Today's reading on "Market Segmentation, Target Market Selection, and Positioning" was very helpful in further developing my social venture concept.

In my Analytics of Social Media class, we had a very interesting presentation by Professor Dan Boyarski form the CMU School of Design. He highlighted the distinction between developing a product or concept and actually consuming it. In other words, as a social venture "creator" I hold only a small percentage of say in what the fair trade coffee cart should actually be. This should be based primarily on the needs of the target market - the greater Carnegie Mellon community.

The "positioning statement" helps me put this product clearly in the lens of this community. Here is my initial attempt of what it would be:

"Our Friend a Farmer Fair Trade Cart provides you an exciting opportunity to be a globally conscientious consumer in a hands-on, interactive environment among all other campus coffee and chocolate vendors because it is the only fair-trade, mobile, self-serve cart that is ready at your convenience."

I know this needs some work, but it's a start! Furthermore, I'm beginning to wonder if such a clear distinction can be made between horizontal and vertical differentiation as stated in the article. Fair trade prices can be competitive with non-fair trade prices. The former is not necessarily more expensive. Hence, I think the term "better" needs further clarification in the context of vertical differentiation. Metrics of better could be a multitude of things - convenience, packaging, taste, etc. How can it be generalized? Furthermore, I can see the Cart being horizontally differentiated from competitors as well - especially if people are informed and prefer fair trade over non fair-trade. Again, this could vary however based on how loyal a consumer is to such products.

Culture Wars: Entrepreneurship in Singapore

When Capital is Not Enough

The Impact of Culture and Social Norms on Entrepreneurial Efforts in the Far East

          I had the good fortune of stumbling across an article on BBC World News today related to entrepreneurship in Singapore that made me think a little differently about macro-level cultural influence on entrepreneurship. Singapore made a commitment to entrepreneurship in the early 2000s (governance, regulation, education) per the recommendations of an economic review committee. Today it ranks number one in the world for ease of doing business and number four for starting a business. It is viewed as the technology and start up hub of South East Asia. In addition to government facilitation and the removal of regulatory barriers, as well as existing infrastructure, Singapore is flush with investment capital. What was striking to me was that with all of these (extremely significant) structural supports in place to support entrepreneurship it is actually a cultural hang up that is dragging on the spirit of entrepreneurship. 

          In short, in many Asian cultures failure is unacceptable and difficult to recover from. In the words of Ron Mahablr, Founder of Asia Cleantech Capital, "In California if you fail that's not necessarily a bad thing...But in Asia if you fail it's tough to turn around from that."(From BBC article) As well all know, failure is far from uncommon in the entrepreneurial realm. In fact, it is almost to be expected at some point over the course of an entrepreneurs career (especially in the event they pursue multiple ventures). The article asserts that in Asia fear discourages young people from pursuing entrepreneurial careers. Furthermore, the education system focuses on conceptual learning with objective right and wrong answers. In contrast, at the inception of entrepreneurial ventures things are seldom so black and white.  Given all Singapore has going for it in the entrepreneurial space (government support, infrastructure, investment) should the next step be an attempt to tinker with the cultural outlook on mattress of success and failure or creative and original thinking? Can this be done? Or frankly, should it? Perhaps Signapore is destined to be a land of opportunity for all with the ideas and drive to succeed in their respective ventures a la Silicon Valley. I am interested to hear your thoughts on this...

The right package

As I read the articles assigned to us this weekend, a case study that was presented at the "India Today: Economics, Technology and People" workshop in CMU in Oct 2010 kept coming back to me. It was the success of the shampoo sachet in rural India. For the longest time, people in rural India (and many in urban India) used regular soap to wash their hair. The price of a bottle of shampoo, even though approx. Rs30 (less than $1), was unaffordable to most. In fact, the shampoo industry did not even consider rural India to be their target market.

However, sometime in 1990s a small company in South India (Chik Shampoo) started selling 10ml shampoo sachets for 25-50 paise (or 1/4 to 1/2 of a rupee) only in the rural markets. Instead of the shampoo bottles available in retail stores, these sachets were sold at local grocers and roadside vendors, easily accessible to almost every rural family, or what large companies thought was not even a viable market. These sachets became a huge success, so much so that everyone now sells not only shampoos, but sachets for everything - other personal products, detergents, food items, etc, all priced at for a few Rupees or less.

So what did the maker of Chik Shampoo do differently? His product was probably not the best shampoo available in the market, so he had nothing unique in terms of the "Product". The "Place" he was targeting was definitely at the bottom of the pyramid, people who were least expected to buy shampoos. But, he had the "Price" and the "Promotion (or Packaging in this case)" right. If shampoos, or any personal products, are made affordable to the poorest of people, then you are creating a huge market that never existed before!

In a similar case, soda companies like Pepsi & Coke introduced the Rs5 bottles in India. They realized that the Indian consumer did not consume at Rs10 bottle of soda (or 300ml as they originally sold them), in fact two people shared one bottle of soda. So they launched new bottles at half the price and about half the quantity (200ml). These new Rs5 bottles have allowed Pepsi and Coke to now target both urban and rural segments of India, hence significantly increasing their target markets.

To conclude, I believe that innovation can be applied to so many areas of a product, and we talked about this in the last class. Sometimes, you can change the whole game by introducing the same product to a completely different market by understanding their needs and buying power. In the case of the shampoo sachets, these minimally priced products actually work out to be more profitable than their more expensive bottle counterparts because of the economies of scale. Even OLPC is trying to adapt a similar reasoning to their laptops; manufacturing in numbers drives costs down. Obviously, this cannot be the strategy for every product, but with the immensely growing markets in developing countries, it is definitely something to think about!

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.