Dreamers Who Do

Among the many things that I will remember from my MBA coursework, is this screencast by Steve Blank.  In it, Blank a lean startup evangelist articulates the soul of the entrepreneur: Dreamers who do.

I am not going to wax poetic about the virtues of the self-made business person, or contribute yet another web tribute to its late high priest, Steve Jobs. Terry Gross, the famed NPR interviewer once rated "entrepreneurship" as the most overrated trait.  I don't  agree, but I am conscious that not everyone is cut from this cloth, has the desire  or means to start their own enterprise, and that many are perfectly happy in all manner of other worthy pursuits.  I may be one of these. I intend the entrepreneurship track next year, and I am not completely sure if I will follow that path.

The Ultimate

Whatever your vocation, however, I am struck by the power and simplicity of Blank's adage, and think that much joy and agency can result when  we learn to dream and do.

Recently,  I read an article in Fast Company. Joss Whedon, the prolific director of last summer's blockbuster, the Avengers. In it, Joss gives a couple of insights of doing, but also dreaming.

Next Actions

Rather than scoping out your whole action plan, Whedon recommends going with your next logical actions, making a small specific plan.  This point resonates with me.  Whether living life or doing a project, it seems that the ones that I do, usually follow a logical progression from one small step to the next.  I moved out Oregon almost on a whim, I got involved in sustainability in college mostly to impress a girl, and because I got a free trip to a conference in San Francisco. Little did I know what a shift this would mean for my future.  My mother would agree with Joss, she always tells her kids to "follow the next indicated step"when exploring a life decision. It seems that as a journey of a thousand miles begins with a single step, it is also completed by millions of subsequent ones.

Eat Dessert First

Joss, who also writes films advises people to engage first with their passion.  Instead of writing things in order, or thinking about the hard stuff, he recommends writing or doing the things that are interesting. Once you've invested your passion in the fun parts, he says, it's easier to do the rest of the necessary grunt work.  This is encouraging for me, as I am often stymied in my ambitious dreams by the arduousness of things that are necessary but boring. I also eat dessert first, so this is an easy one to embrace.

Keep Learning

One thing I appreciate about BGI is its interdisciplinary approach to learning. We catch a broad view of business, and engage in a wide variety of issues. This attracts a wide range of people with a variety of experiences.  One way that I learn well is by interacting with such people. Diverse experiences and viewpoints stimulate my learning, and spark my creativity.  Work is a big part of learning for me too.
A few years ago I was in Australia, and lacking any other options, picked up the business classic "Rich Dad, Poor Dad" While I found much of the author's insights spurious, particularly about real estate as the path to riches ( it was fall of 2008!). But, one thing has stuck with me from that book: Work to Learn.  I have had the opportunity to work with some outstanding people, in areas such as sustainability, farming and green building.  Making the aim primarily about learning has given purpose more than the paycheck.

Finally…

Enlist your Friends

I am consistently surprised by the creative minds that I encounter at BGI. Even more, though, I am inspired by their capacity to get things done and make dreams real. I have a lot of good ideas, and am fairly good at getting things done.  I appreciate the peer pressure at BGI, even if it is not intentional, it makes me want to do more than I do, and to know that there are people that can help me along the way.

So here's to all the fun projects I have been putting off these past 9 months. Thanks to Whedon for the good practices, and to my loyal BGI readers for the inspiration!

"Designed in China"

Zhang Wuyi built a submarine.  The Chinese farmer from the Hubei province in China has designed and hand-built  seven submarines, some that he has sold to local businesses. According to the Rueters, his latest version has a dive depth of 96 feet, and is equipped with vacuum hoses for harvesting sea cucumbers.

I came across an fascinating article in a recent issue of Atlantic Monthly.  It chronicles the burgeoning DIY culture of China, and profiles a number of innovative inventors and some of their projects. A few of these showcased include a homemade helicopter, DIY prosthetic limbs, robots, disaster survival pods and emergency fire escape slides. As a DIY enthusiast, I am fascinated by these inventions. Not only because of their innovative nature, but for the spirit of creativity and independence that they represent.

I don't know about you, but personally I have always been bothered by the label "Designed by Apple in California, Assembled in China"that is affixed to every Apple product on the market.  It has always seemed to underscore a basic assumption of the past 10 years.  That is, the smart creative minds in Silicon Valley come up with clever ideas and then the Chinese spew forth the consumer products that the developed world demands.  I don't disagree that China is a  powerhouse, it currently produces about 20% of the world's goods, or that Apple products are not marvels of design. However, the idea that China is lacking in innovation is quickly losing ground.

The number of patents offered in China are skyrocketing. In 2012, the China’s State Intellectual Property Office (SIPO) granted 1.26 million patents, more than any patent office in the world. Furthermore, Chinese inventors ranked ninth among other nations in US patents offered, and had increased their applications by 41% in the past year. US Patent applications by Chinese inventors have increased more than 1000% in the last decade. Though China, which spends roughly 300 million a year on R&D lags behind the US in this category, its ability to convert R&D money to IP is nearly 4 times that of United States.

To be fair, many are suspicious of Chinese patents, the majority of which are Utility Model or UM varieties, a form that does not exist in the US, and which some claim are inferior to invention patents. Others claim that they are vehicle to steal IP from other countries, and are merely tweaking existing technology. 

There is surely much truth in this accusation, whether or not they lack in quality or originality, the Chinese patents seem to surpass in quantity. It will be interesting to see what this invention trend means for innovation in the long haul. DIY culture, long thought to an indicator of innovation could be a harbinger of China's design future.

  

Biomimicry in Business?

I was reading an article in the Economist the other day. It reported on the creation of unmanned gliders, which, unlike planes, rely on wind currents and thermals to maintain speed and loft. Tactical Long Endurance Unmanned Aerial System (TALEUAS), is being developed by the Naval Post Graduate school in Monteray California. TALEUAS relies on a sophisticated software and sensors, which can detect the presence of thermals and pilot the plane to take advantage of the lift. Much like its avian counterparts, it can stay aloft all day drifting from thermal to wind gust.

Bullet train, inspired by Kingfisher's beak

This is a fascinating take on biomimicry, the discipline that looks to nature for engineering and design solutions. Inspired, I came across a number of interesting articles and insights online. Those of you looking for inspiration, are encouraged to consult the website, AskNature.org, which catalogues the strategies that nature employs for a variety of functions. For example,  carbapenem-resistant enterobacteriaceae (CRE) is an drug resistant bacteria that is reaching epidemic levels in hospitals. According to the Center for Disease Control,  it is found in 18% percent of long term acute care facilities, and it kills half of the patients that it infects. CRE and other “superbugs” are becoming more difficult to control because the development of new antibiotics is failing to keep pace with the evolution of these bacteria. Instead of a antibiotic arms race, however, researchers, such as Anthony Brennan, a materials science and engineering professor at the University of Florida, are taking cues from sharks to mitigate the spread of these powerful pathogens. Shark skin has an unusual characteristic in that it does not harbor algae or aquatic bacteria. This is because its rough surface, which paradoxically reduces drag in the water( inspiring the now banned “shark suits” of the 2008 Summer Olympics) also prevents bacteria and algae to attach to its skin. Brennan, who replicated the physical characteristics of the skin on hospital countertops and doorknobs, has reduced bacterial colonization of MRSA virus by 86 percent, e-coli bacteria by 99 percent and Pseudomonas aeruginosa by 100 percent after one hour of air exposure. Researchers are hopeful that this strategy can mitigate the effect of CRE.

"Sharkskin" that repels bacteria

These are fascinating examples of using nature as a design primer, and biomimetic principles are also gaining credence as business strategies. Green Biz ran an interesting article about this here.

It is not surprising that nature, with over 3.8 billion years of experience could be a powerful source of insight into design and business solutions. At its core, the principles of the lean startup, with its rapid iterations are not unlike the process of evolution, where nature “pivots” 

towards a better system.

It will be exciting to see what lessons the natural ecosystems have in store for us, and how we can apply insights therein towards creating a more sustainable future.

The misunderestimated George W. Bush?

George Bush is apparently smarter than a group of Stanford MBA students, a troubling fact, because that means he’s probably smarter than me.   

A recent blog by Keith Hennessy, former Assistant of Economic Policy for our 43rd President asserts that the public persona of a  “...good ol’ boy from Texas who is principled and tough, but just not that bright.”  contrasts with the reality of a quick-minded and analytical politician who, according to Hennessy,

“...is extremely smart by any traditional standard. He’s highly analytical and was incredibly quick to be able to discern the core question he needed to answer. It was occasionally a little embarrassing when he would jump ahead of one of his Cabinet secretaries in a policy discussion and the advisor would struggle to catch up. He would sometimes force us to accelerate through policy presentations because he so quickly grasped what we were presenting.”

Okay, another rosy-eyed view from a Bush disciple. This assessment of the president, however, is corroborated by New York Times Columnist David Brooks, who asserted in 2012,

“[Bush] is 60 IQ points smarter in private than he was in public. He doesn’t want anybody to think he’s smarter than they are, so he puts on a Texas act...I’ve rarely seen a person whose off-the-record manner is so different from his on-the-record manner.”

Before you think this a misty-eyed tribute to W, on the occasion of his library dedication and new found appreciation of his artistic self expression, I reserve the right to distinguish intelligence from judgment.  Here is an insightful piece that gives good perspective on this issue

It is not especially fascinating to me is that President Bush, a graduate of Yale and Harvard Business, born in New Haven, CT was able to cast himself as a homespun Texan. 

Karl Rove would approve

What is interesting is what this says about a distinctly American populism where intelligence, particuarly garnered in an educational setting is a political liability.

Why is this?

It’s probably Abraham Lincoln’s fault.   I am stumbled across a fascinating book, “How Lincoln Learned toRead” by Daniel Wolff,  which chronicles the formative education of twelve iconic americans.  Abraham Lincoln, though fairly well educated for his time and remarkably well read, honed his image as a log cabin railsplitter during his presidential run of 1860. Though this identity of a backwoods laborer was based on fact, it was embellished for political gain in the campaign, and became part of his national image.

According to Wolff, Lincoln was likely influenced by political success of Andrew Jackson, the military hero who victory was due to his appeal to frontiersman who distrusted New England elites.  A similar strategy worked with the Indian fighter William Henry Harrison, who despite being the son of a wealthy plantation owner, polished his image as a "homespun backwoodsman who spent his days on his porch thinking homely thoughts of frontier virtues."

My own readings of presidential history have shown a similar trend. Teddy Roosevelt, the Harvard educated son of wealthy New York aristocrats, credited his twenties spent cattle wrangling in the badlands as a requisite in his election to the presidency.

Jimmy Carter, a Navy officer and nuclear engineer, was better known as a Georgia peanut farmer. I didn’t know that Bill Clinton was a Rhodes Scholar until I visited his library in Little Rock a few years ago.

In many of these cases, it seems that these statesmen saw it politically expedient to stress their ordinariness. Other candidates that have done otherwise, like Adalai Steveson, John Kerry or Mitt Romney (I’m smart enough to fix the economy) have not.

There are certainly exceptions to this trend, but it is strong enough to warrant attention.

What does this say about American’s views of education?

I have observed a powerful dualism in American culture, on one hand we stress the importance of education, were college completion is generally considered the minimum threshold for mainstream success. This contrasts with the model of some European countries, where a certain percentage of high school students are directed towards the trades. Additionally we invest massive amounts of funds and school hours toward school metrics that monitor student achievement.

At the same time, we tend to value experience over education.  Entrepreneurs and college dropouts like Steve Jobs and Bill Gates are our most esteemed cultural heroes, and Joe the Plumber’s views on politics are given creedence by about half of the population.

This is fascinating, and I would like to know why this is. Is it because our cultural history is one rooted in pragmatism and “what works”? Did this distrust of "book learning' " stem from an early desire to differentiate ourselves from our British overseers? Is it a cultural value that regards experience over intelligence?

Perhaps we should consider this in our approach to education. Maybe our traditional education, which tends to value math, science and language arts, needs to awaken to the validity of practical and hands on learning, as well as recognize the power of experience as a learning tool.  I like Barack Obama and tend to agree with him, but I also understand that "Joe the Plumber" and his ilk have some insights too. In a democracy we recognize the validity of all perspectives and approaches, and we should have an educational system that reflects this tolerance too.

"I"PO: Equity Gets Personal

A good investment

In 2008 Portland entrepreneur Mike Merrill sold shares of himself in an IPO to his friends.

For $1 a share, he gave shareholders a slice of potential profits, and the right to decide the realm and scope of his creative projects.

This soon got complicated. According to Wired Magazine, when he chose to move in with his long term girlfriend in late 2008, his shareholders were furious that he failed to consult them before such major life shift. They were concerned about the deleterious effects that such a decision could have on his future profitabilty. Chastened, Mike now submits all major decisions (and a number of lesser ones)for approval from his investors. Subjecting their relationship to the whims of shareholders did not please his girlfriend. Merrill’s suggestion that she buy more shares for a bigger say didn’t bode well for their courtship.

With over 3,700 voting shares in the hands of investors( Merrill retains a 96% non-voting stake) it has been an interesting experiment in crowd sourcing, While it was recently mandated that he embrace a vegetarian diet and register as a Republican, shareholders nixed his desire to grow a mustache, and thwarted the physical prowess proposal, a plan to join a local Jujitsu gym.

I found this article an amusing primer on the perils of equity financing. Though Merrill is not the first to chart this path.  In 1997, David Bowie sold $55 million in “Bowie Bonds” to Prudential Insurance, in exchange for full rights of future assets of his first 25 albums. The rights returned to Bowie after 10 years.  Bowie’s example has inspired other business-minded musicians, though Goldman Sachs efforts in 2012 to orchestrate a similar bond (rated BBB-) for Bob Dylan failed to net investment interest commensurate with the $300 million valuation.

Shrewd investors take note: a stake in the Bieber kingdom may have to wait a while.

Though Merrill’s experiment is mostly tongue in cheek, cash-strapped students are beginning to embrace equity to finance higher education and life learning. Upstart  is a website that supports the entreprenurial and educational pursuits of recent grads in exchange for a fixed percentage of their future income. For wages over $30,000 year, Upstart takes a slice for ten years.  The profiles of the students funded is impressive and inspiring. Though it remains to be seen if this would be a viable investment model for “average” students in a competitive job market, it is a noteworthy experiment in supporting the dreams of highly motivated individuals.

Count Merrill’s new girlfriend as one of these.  Financially savvy, she recently exercised her exclusive stock options to secure more sway. Additionally, she has been winning over skeptical investors left and right. Merrill is smitten.  According to Wired,

"Instead of getting me flowers, she is trying to buy me, " Merrill says. "It bodes well."

At $16.30 a share, it surely does.

Go for a hike

The education team is currently studying KIPP schools, specifically a middle school in Philadelphia.  KIPP is a very innovative charter school network that seeks to increase college matriculation and college graduation for low-income students in predominantly urban areas. As I wrote in a previous blog, their results have been impressive, with over 89% enrolling in college and 33% completing college in four years. Additionally, the organization truly embodies the Kaizen approach of continuous improvement, and aims for an eventual graduation rate of 75%.

Recently, one of our teammates, Cameron Miller, shared a blog of a Kipp teacher, that said that the typical teacher works about 70 hours a week. Similarly, teacher retention rates are 73%. My concern for KIPP is this: while I support the mission and the ends, I have to ask, is it truly sustainable to ask teachers to work 70 hours a week, even if it is for a laudable goal?  In our screencast on social sustainability, Marsha Willard highlighted some potential injustices of the modern age, one of which is that our workweek, though legally 40 hours, is often 50-60 hours. We accept this workload as a necessary requirement for getting ahead, and perhaps take secret pride in our work capacity.  Working BGI students can relate, and I suspect many of us take a measure of our personal worth from our regular 60-70 hour work weeks.

At the same time, do we ever ask whether this is healthy or even sustainable? 

We’ve been learning a lot about the Toyota Way, its perpetual quest for improvement, and its ability to engage, empower and value employees on an individual level.  As we observed in the NUMMI plant case, people are foundational to the success of the program. 

My hope for KIPP, BGI and all organizations, is that our worthy ends can be coupled with sustainable model that honors, uses, but does not exhaust its human resources.

It is necessary to empower low-income youth and equip tomorrow’s business innovators, and truly a privilege to be a part of that creative goal. Let’s make an effort to ensure that our means for achieving this are equally regenerative and life-affirming.

Time is Money

Residents of certain countries in Africa have resorted to using mobile phone credit as a stable, defacto currency.  According to the Economist, it has become a preferred payment method in countries whose economies have been wracked by instability and inflation.  In Zimbabwe, while the US greenback has largely replaced the Zimbabwean dollar, the scarcity of US paper currency has made it popular for shop owners to give small change in the form of mobile minutes. 

This trend of using mobile credits as cash has opened up some valuable business opportunities for marketers looking to expand their reach into developing markets. JANA Mobile, a Boston based marketing and research company has access to over 2.1 billion consumers in 85 developing countries around the world.  Their business is simple.  They offer consumers phone credit to complete marketing surveys about their buying preferences.  Alternately, they can offer phone credit rebates to incentivize certain purchases of partner brands.

Paying consumers for market information is nothing new.  Recently I was given $50 to fill out a survey for the Twin Registry of the University of Washington. What is striking about JANA’s case is their ability to recognize mobile minutes as an easy and effective payment system in emerging markets and use it for marketing purposes. Consumers are happy because in addition to phone time, they can also buy groceries and even pay their utility bill with these credits.

The article in the Economist  has sparked a bit of fascination for me in alternate monetary systems.

Many of you have heard of Bitcoin, the world’s most widely used alternative currency.  Developed in early 2009  by a psydeonomymous  hacker named Satoshi Nakamoto, Bitcoin is not released by a central bank or government, but is distributed via a decentralized peer to peer network of computer users.  Unlike fiat currency, it is released at a predetermined  geometric rate that will cease once the amount reaches 21 million bit coins in total distribution. Currently, the value of the world’s Bitcoin is approximately 200 million USD and is accepted by about 1,000 merchants. The history of this currency, as well as the method of disbursing bitcoins, a process called bitcoin mining, is fascinating, and I would encourage you to read more about it here.

While these developments are interesting, it is hard to imagine that small “hobby currencies” would have much in impact in the world of global finance and central banks. 

Or is it?

Amazon recently announced that it would be releasing “Amazon coins” an online “currency” that can be used on their marketplace as tender to purchase developer apps and electronic purchases.

At first glance it is difficult to know why Amazon would go to such trouble to market these coins, which many see as just another unnecessary step in the transaction process.

A possible reason came to me last night in Portland when I overheard the bartender inform a disgruntled customer that there was a $5 minimum for credit card purchases. I had cash that night, but the exchange reminded me of similar rebuffs that I had experienced trying to buy a 78 cent packet of tic tacs or a two dollar cup of coffee from the 7-Eleven. 

Whenever a retailer swipes a credit card, it has to pay around 3 percent of the amount to the merchant bank which oversees the transaction, this is called a merchants fee.  This percentage is higher for small purchases and highest for online sales.  In fact, a recent act of congress last year increased the maximum allowable fee for small purchases.

Amazon, as most of you know is pursuing a strategy that increasingly emphasizes apps and ebooks as a primary revenue stream.  Because of the vast majority of these apps are 1-2 dollars, it makes sense for them to find ways to maximize profit by minimizing their loss to these fees.  By bundling numerous $0.99 app purchases into a larger single purchase of Amazon coins, they are reducing the amount that they have to pay to these credit card companies and adding to their bottom line.

Secondly, Amazon plans to give away millions of dollars of these Amazon coins to consumers over the first months of its release.  Because these can only be used on digital content, like apps and ebooks, it will do much to “prime the pump” of profitable e-sales, and hopefully induce more customer engagement in this down the road. 

I don’t see Amazon coins attempting the same paradigm shift that mobile money or bitcoin is trying to achieve, but it shows a very shrewd strategy to increase app sales while minimizing expenses to credit card companies.  Then again, Amazon is a huge company with over $61 Billion in sales last year, they could be a trendsetter in this money frontier.

Only time will tell.