some things never change
How can we harness the dynamism of business, the convening power of
social networking, the insights of biology, the creative energy of
design, and countless other planetary leverage points to ensure people
and the planet thrive simultaneously? Augustus Goanue, Director of
The Center for Sustainable Energy Technology (CSET) in Liberia, has
his own bright green idea: change the law, and you change everything.
I met Augustus while working for the President of Liberia, Ellen
Johnson-Sirleaf, as a legal adviser in her administration's efforts to
catalyze sustainable investment.
Augustus doesn't know Francis, but his world-changing vision touches
his life. Francis is one of the two billion people living in the vice
grip of energy poverty -- without light, without heat, without a
single electron of power. He was 7-years-old when he was ripped from
his family, school, and community to fight in Liberia's diamond-fueled
armed conflict. When I met him, five years had passed since the end
of the civil war, and Francis was now my appointed security guard in
Monrovia, Liberia.
My friend Rachel, who lives in Monrovia, recently told me two
fascinating bits of news about Francis. First, he has a girlfriend.
Second, he has a light bulb. He added that the city of Monrovia now
has street lights, too. The good: light stimulates energy and
enterprise, learning and more dynamic livelihoods. The bad: Francis'
light bulb and Monrovia's street lights -- both powered by coal --
form a piece of the seventy-million tons of global-warming pollution
that are collectively dumped into our atmosphere. We live on a young
and urbanizing planet. What if every Francis (and Francoise) had a
light bulb?
Economist Nicholas Stern estimates the Global South will need $100
billion per year by 2030 to meet the challenges of ecological and
social restoration. We need laws to unleash this investment; to drive
reality-bending models of zero-emission communities across the Global
South. Al Gore, Jonathan Lash (President of the World Resources
Institute), and others have pressed the case for a "unified earth
theory": an approach that links solutions to extreme poverty and the
environmental crisis. Augustus put this grand theory into national
action. His radical thinking spurred the creation of the Liberian
Renewable Energy and Efficiency Policy. His world-changing vision: a
thriving Liberia will not only provide clean electrons to Francis'
light bulb -- it'll give him a green job, too.
In post-conflict Liberia, success in trade, as in life, requires using
creativity by extracting the most out of an extremely limited pool of
resources. For CSET, leveraging the law to fuel disruptive clean
technologies, tap community capital, and stimulate leapfrog innovation
is not part of a wider array of strategic options -- it is the only
option. Why? Liberia's "hard" infrastructure -- transmissions lines,
national power grid, generation facilities -- was decimated by decades
of rebel bombardments. The "soft" infrastructure of energy policy is
even harder to come by. What exists of the legal and regulatory
framework is fragmented and uncoordinated. But starting from zero has
its benefits.
The Policy, which calls for a bold slate of tax reductions for green
infrastructure, investment incentives for green jobs, and clean-energy
technology transfer accelerators, holds the potential to help Liberia
leapfrog its hard infrastructure handicap by turning itself into a
clean-energy investment magnet. Its provisions would establish a
native market for clean technologies through sharing tools,
technology, and know-how -- a critical mix to triggering an ecosystem
of green, open innovation.
As Augustus relentlessly told me: "Law is a critical piece to
stimulating a distributed, clean-energy system in Liberia. We need a
clean planet and millions of jobs for our country." CSET's message of
job creation through distributed clean-energy generation is resonating
in unexpected ways. As the President's Chief of Staff emphasized
during a meeting: "Eighty-percent of our population is unemployed.
Our citizens need to see a tangible path to a peaceful future. Jobs
through renewable energy is not just an economic and environmental
issue -- it is a security and stability issue for us."
We need the bold, restorative policies that CSET is championing in
Liberia replicated across the Global South. For Francis and the
millions like him, policy development has never been so enlightening.
In 50 words or less, what significant unmet social need is your company addressing?
Social entrepreneurs need a disruptive financial innovation. They need a platform, a bridge to connect with the pool of seed capital in the hands of our friends, our family, and the growing number of people who believe a for-profit model allows for a deeper, more sustained impact than a traditional non-profit.
You can view a manifesto (of sorts) here: http://huff.to/9dBjjB
What innovative product, service, or business model are you developing to address this need?
We're flipping the standard funding model on its head.
33needs is a web application that connects the entrepreneurs solving our world's biggest needs to micro-investments. At our core, we're a deeply social experience to finance change. We know the desire to connect is so deep in who we are, and our platform is built around that truth.
We're kind of like the App Store for social ventures.
We're trying to increase the number of social impact investors just as we're increasing the number of social ventures. Think about how the Obama campaign flipped the standard campaign fundraising model on its head through harnessing small repeatable donations from the crowd.
33needs turns a 21-year-old college kid, the waitress at our Denny’s HQ, and our college and law school friends into social impact investors. We were frustrated with financing our ideas, and this emerges from our annoyance.
The rise of social entrepreneurship, the convening power of the internet, and the reduced costs of launching a startup in today's wired world are driving the opportunity. For-profit crowdfunding platforms exist in the music, film, and fashion industries. The internet shifts power from institutions to you; It's people-powered investing.
We believe people will see 33needs as a portal to an entirely new impact-based asset class. Here's how it works:
A 37-year-old man in Los Angeles, CA could invest as little as $10 (or 1 "Part") in Husk Power Systems, a venture providing low-cost energy services to rural India.
A 19-year-old woman in Mumbai could invest $20 (or 2 "Parts") in Voxiva, a venture using cell phone technology to improve health-care delivery in developing countries.
Who benefits?
The investor (called a "Backer") receives a % return based on venture revenue. The venture receives seed capital. 33needs receives 10% of the total funding target. The world gets just a little stronger.
Overview of the 7 "Big Need" Categories:
1. The Planet - How can we help promote a cleaner and more sustainable global ecosystem?
2. Education - How can we help more people get more access to better education?
3. Community - How can we help connect people, build communities and protect unique cultures?
4. Heath - How can we help individuals lead longer, healthier lives?
5. Opportunity - How can we help people better provide for themselves and their families?
6. Sustainable food - How can we provide for a growing population in a sustainable way?
7. Everything else - Sometimes the best ideas don't fit into any category at all.
How can your social objectives be sustained in a for-profit model?
In other words, how do we make money?
We've selected the initial 33 startups for a June 23 launch through a nomination and application process. Each social venture has 60 days to raise $5,000, for a total of $165,000 (33 x 5,000). 33needs collects 10% of the funding target as a platform fee.
We're doubling the number of ventures on the platform from months 6-12 and tripling the number of startups from months 12-16.
Back-of-the-napkin 12-month revenue projections:
$16,500 (months 1-2)
$16,500 (months 2-4)
$16,500 (months 4-6)
$33,000 (months 6-8)
$33,000 (months 8-10)
$33,000 (months 10-12)
= $148,500 for year one
Describe your business model. Who are your customers? Why will they pay?
1. Investors
Because of securities laws, particularly the accredited Investor rule (rule 501), the average person is locked out of the startup funding cycle.
There is a vast pool of small-scale investment capital in the hands of my brother, my friends – and your friends! Think about how the Obama campaign flipped the standard campaign fundraising model on its head through harnessing small repeatable donations from the crowd.
That's a financial innovation we can all be proud of.
Our target user:
A 21-year-old college student. She's purposeful, but pragmatic. She's not afraid to make mistakes. She's bored by blah websites and apathetic companies; she demands authenticity. Born between 1978 and 2000, she's a Millennial, which include 95 million young people up to 30 years of age -- the biggest, most diverse, and best-educated age group in the history of the nation.
How will they pay?
Through purchasing "parts" in social ventures on the site. Her purchase of one, $10 "part" in a particular social venture entitles her to a % of their revenue, but not equity, for a period of two years. Before her money is released in stages to the social venture, it accrues interest in a 33needs escrow account.
2. Entrepreneurs
More and more entrepreneurs view business as a powerful tool to solve social problems here and abroad. They believe adopting a for-profit model with an explicit social mission allows them to have a deeper, more sustained impact than a traditional non-profit.
They are crying out for an innovation; for a http://sellaband.com or http://fashionstake.com/ approach to raising startup capital. 33needs only works with disruptive, game-changing ventures. Many are web-based, but not all.
How will they pay?
10% of their funding target, which is typically $5,000, is assessed as a platform fee.
How is this legal?
If the investor's core motivation is not an expected financial return, but impact or consumption, the securities laws do not always apply. Additionally, the "Parts" do not share many of the common elements of stock.
We've been working with law professors at the University of Michigan, the University of Denver, Harvard Law, Pittsburgh Law, and others to create a structure that satisfies investor, startup, and regulatory interests.
How will you reach your customers?
1. Internal Viral Loop 33needs.com is powered by a viral expansion loop - just by using the site, it spreads.
A startup requesting funds has an incentive to invite friends, family, colleagues, and like-minded strangers to sign up, and each new member brings others with him. This pushes our viral coefficient up. We estimate a viral coefficient of 2.0: each person who signs up is worth, on average, two people.
33needs shares the common elements of viral companies: 1. We're web-based; 2. We're free; 3. We don't create content, just the platform; 4. We have an incredibly simple platform; and, as mentioned above; 5. Raw self-interest spreads our impact.
2. External marketing campaign
Reach out to the influential blogs. Some have 330,000+ followers on Twitter and hundreds of thousands of subscribers. A positive mention in one of the most influential (Social Edge, for example) creates a heard mentality of positive retweets, other blog mentions, and positive reviews. More mainstream sites and magazines, including Inc Magazine, Fast Company, and Entrepreneur Magazine frequently pick up stories from their content.
We've done this before: I targeted a few on Twitter, including Social Edge, which drove lots of traffic to a piece I wrote for the Huffington Post. The result? 1,296 retweets, 47 Facebook shares, and one of the most popular posts in March.
The community is larger and more interconnected than one would think.
FAQ
1. How do measure the social/environmental impact of the ventures?
Just a few pics of the Entrepreneurship@Cornell Celebration. Thanks to
everyone for coming; please stay in touch.
Big thanks to Makafui for taking the time to put this together.
Ory Okolloh (24) doesn't just use Google Maps to find a restaurant, she harnesses it to track atrocities and human rights violations. Derek Lomoas (26) doesn't see business as evil; he sees it as a tool to distribute interactive games for children in Africa. Mark Rembert (23) doesn't use his mechanical engineering degree to build bigger buildings; he's using it to repower his city with renewable energy.
Fund them. Make money. Join the fun @ 33needs.com
Big honor: Thanks to Sachi & Geoffroy for the invitation to keynote
the University of Pennsylvania Model UN Conference XLIV in November.
We'll make it a special deal for everyone :).
33needs is a web application that connects the entrepreneurs solving our world's biggest needs to micro-investments.
We're kind of like the App Store for social ventures.
We're trying to increase the number of social impact investors just as we're increasing the number of social ventures.
