Sam Lakha, Manager, Volans Outreach.
Gates Switches from Mosquitoes to Fireflies
Was sent a link to Bill Gates’s latest TED talk, on climate and energy, and watched this evening between sessions. This time, instead of releasing mosquitoes into the audience to underscore the threat of mosquito-borne diseases, he opens a jar of fireflies. They don’t get very far, which I hope isn’t a reflection of the prospects for the energy “miracles” Gates calls for - but it’s an impressive presentation nonetheless. And it’s the first time I’ve come across the Terrapower idea.
The address for this blog entry is: http://www.volans.com/2010/02/gates-switches-from-mosquitoes-to-fireflies/.
- John ElkingtonHow the Boomers Will Pay Back
David Metz, former Chief Scientist at the UK Department of Transport and one of the brains trust we are assembling for our project on ageing, entrepreneurship and sustainability, forwarded me a link to an interesting piece John Lloyd just did in the Financial Times. Far from pessimistic, Lloyd argues that rather than turning into selfish protectors of the status quo, Boomers will seek to repay the surplus they have taken out. “Watch this becoming a large political project of our next decade,” he concludes, “a planned and enabled use of the sap and vigour left in the autumnal generation, so that the younger ones see not a population of the demented, dependent old, but men and women alive and engaged in the possibilities of the world they will leave to their youngers and betters.”
The address for this blog entry is: http://www.volans.com/2010/02/how-the-boomers-will-pay-back/.
- John ElkingtonGreen Cities Event in San Francisco
The Clean & Cool Mission to San Francisco is going very well, though I’m finding my frequent flights of recent days have hammered whatever it was that I got a week-and-a-half ago down into my lungs. Still, I managed not to collapse into paroxysms of coughing during the Green Cities event last night. Today, the city is cloaked in rain, but I ventured out to have lunch with Jennifer Biringer and Patrin Watanatada of SustainAbility at a nice vegetarian restaurant. This evening: an event at Arup - cities again, I expect, a theme that makes much sense, since that’s where the bulk of us now live, and that innovations tend to evolve not independently but in clusters.
The address for this blog entry is: http://www.volans.com/2010/02/green-cities-event-in-san-francisco/.
- John ElkingtonAllocating Patient Capital
The funding options for social innovators is diversifying as investors, from private foundations to venture capitalists, experiment with social impact investing. This area, appealingly re-branded ‘patient capital’, is developing fast, with networks like the Rockefeller Foundation-backed Global Impact Investing Network dedicated to scale the sector.
Among a growing number of funds being created in the impact investing market, the Acumen Fund stands out as one of the pioneering ones. The latest refection by its Founder and CEO, Jacqueline Novogratz, its worthy of sharing broadly, as it touches on key issues to the growth of the sector and the scaling of its impact.
So here it is, reprinted:
“In the first years of Acumen Fund’s existence, the two most challenging questions we faced were “Can this scale?” and “Will you ever exit?” As I wrote in my last letter to you, we’re seeing significant scale in our investments ranging from maternal health, to public toilets and solar energy. Of course, the more we find answers, the deeper our questions become. Regarding scale, we’re now doing more intense dives into understanding the trade-offs. On one hand, how do our investees avoid corruption in partnering with government; and on the other, how do they avoid being pushed to serve a wealthier clientele by more traditional investors focused more on profitability than on serving the poor?
Regarding exits, the news is good. Indeed, we exited two investments this quarter and hope to exit a third in the coming months. Most exciting is Jamii Bora, the affordable housing development outside Nairobi, Kenya, which has fully repaid its $250,000 loan! Three years ago, we lent this money so that Jamii Bora could build a housing development for low-income slum dwellers who had proven their ability to repay, but would never qualify for a traditional bank mortgage. I remember standing on the open land an hour outside Nairobi’s slums, listening to the inimitable Ingrid Munro, Jamii Bora’s founder, laying out her vision: the organization would build 2,000 houses, each equipped with an indoor kitchen and bathroom, a garden and a place for laundry; they would use solar energy, and create an efficient water system so that the water could be treated and recycled; and they would eventually see a town of 12,000 people flourishing.
| Recently, I visited a development with 750 constructed houses along with thriving shops and a full-fledged school. More than 240 families - or about 1,300 individuals - have moved in, and many have painted the trim on their block houses, and planted gardens in backyards. Most thrilling to me was visiting Jane’s home, for I had spent time with her a year ago in her temporary dwelling in the Mathare Valley slum (here’s my TED talk on her journey). Her house was beautiful: trimmed in orange and green with sunflowers touching the roofline, it seemed a palace compared to the shanty where Jane had spent her life. |  Jane’s dream home. |
The most extraordinary moment occurred as we stood in her new indoor bathroom which contained a toilet, sink and shower. “In Mathare,” she said, “the water is dirty and the children are always sick. The little ones especially are always suffering with diarrhea and it is too far to go to the toilets and too dirty and expensive as well. My only option was flying toilets, but the diarrhea could be so bad that the children would soil the floor. But now, the toilet is right here in your house.”
She then demonstrated the ease of using a toilet and flushing waste away. Nothing has ever reminded me of the indignity of defecating in bags and then throwing the waste on rooftops like the sight of Jane and her new toilet. More than 1.5 billion people have no access to good sanitation. It needn’t be that way.
Never before have I understood in a spiritual sense the potential of patient capital. Capital can be used to draw us close or to distance us from one another. Traditional societies that forbid usury want to ensure the group stays together and supports one another. The sub-prime debt phenomenon, on the other hand, is a powerful example of using capital in a way that distances. Wall Street investors had no stake in whether homeowners repaid their mortgages as they thought they were “safe” up to a certain default rate. Borrowers had no relationship with a traditional banker. The system was bankrupt of values and accountability.
In an increasingly interdependent world, we must think of ourselves as a single tribe. In a world with so much excess wealth on one hand and poverty on the other, we need a new asset class. Patient capital is money invested not for undue profit but to support opportunities for disadvantaged communities. Money earned is used to invest in others and not for personal gain; and investors provide management support for the sake of the others’ success. In return, the investee is accountable to repay as a member of that same community.
Patient capital can be a cornerstone of a new social contract and a more nuanced type of capitalism for our 21st century world. Acumen invested a quarter million dollars in an organization focused on slum dwellers to build an affordable housing development – an investment banks would not make. Today, a hopeful, diverse community exists. Jamii Bora has repaid Acumen, and we can now invest in other organizations focused on bringing life sustaining services to the poor. Finally, Jane’s joy in what she has herself accomplished is a joy shared by every Partner and team member of Acumen. She did it herself, of course, but it was the brilliant vision and execution of Jamii Bora and the patient capital financing from Acumen and others that enabled her to realize her dream.
The week in Kenya was one of the most extraordinary I’ve experienced: I’ve detailed it in a fairly long journal. Ecotact toilets now serve nearly 15,000 people a day; Insta is producing more than 15 million packets of protein-fortified porridge and is on its way to creating a retail market; and we are engaging in an exciting new agricultural investment focused on hybrid seed production and distribution.
| Finally, on a personal level, thanks to Acumen Fellow Suraj Sudakhar, over 90 people in the Kenyan slums have joined seven self-organized book clubs to read The Blue Sweater, (which comes out in paperback today)! He and seven young men from the slums organized a gathering for nearly 100 people in Kibera to discuss the ideas in the book while I was there (an event I recount in the Huffington Post.) The quality of the questions was incredible. People asked about balancing family and leadership, about financing existing projects, and about what individuals there could do to help bridge the gap between rich and poor. It was truly one of the most moving evenings of my life and I thank every one of those young men for giving so much of themselves to make it happen. | 
Nearly 100 participants turned out for |
It has taken me a few weeks to understand what happened that night. First, I was struck by the generosity and organizational efficiency of the young men who encouraged people to come from five different slums, some of them traveling more than 90 minutes on buses. Second, though everyone spoke about the corruption and challenges to those living in the slums, no one put themselves into the category of being “poor.” Rather, they hungered for what they could do to overcome challenges and help others as well. Ultimately, the individuals in that room seemed to transcend a feeling of Us and Them, and moved to a place of We. It is on this shared sense that I feel an ever-deepening commitment to this work and everything that it promises.
It will take each and every one of us, rich and poor alike, to build the world we dare to imagine. But that night in the Kibera slum, for one powerful moment, I got a glimpse of what is truly possible.
I wish all of you everything that the world has to offer.
Jacqueline Novogratz
The address for this blog entry is: http://www.volans.com/2010/02/allocating-patient-capital/.
- Alejandro LitovskyA Social Enterprise ‘Square Mile’ for London?
Was very interested to see the proposal that “a social enterprise ’square mile’, similar to London’s Canary Wharf business district, should be created as part of the 2012 Olympic legacy.” According to socialenterpriselove.com, the idea was suggested by Mark Sesnan, who heads one of the UK biggest social enterprises, leisure company GLL.
It chimes with our thinking around mapping and co-evolving a London Sustainability Cluster in the build-up to 2012. To date, we have had behind-the-scenes conversations with the likes of SustainAbility (which will be 25 in 2012), Futerra and the Carbon Disclosure Project, but it looks as though we need to open out the conversation.
The address for this blog entry is: http://www.volans.com/2010/02/a-social-enterprise-square-mile-for-london/.
- John ElkingtonThe Coming Clash of Generations
Am preparing to lead a joint SustainAbility/Volans Book Club session tomorrow evening, which will focus on George Friedman’s The Next 100 Years. Reading it in its entirety recently on a flight from somewhere to somewhere, I came away even more convinced that we should be basing our work not so much on issues like climate change, important though that agenda is, but on demographics - overlaid with multiple forms of footprint analysis, of the sort that the Global Footprint Network is working on.
I will be taking in several other books that I think people should be reading, among them Connected: The Surprising Power of Our Social Networks, by Nicholas Christakis and James Fowler. I am also nibbling at the edges of People Quake: Mass Migration, Ageing Nations and the Coming Population Crash, by Fred Pearce. And, on my to-buy list: The Pinch: How the Baby Boomers Took Their Childrens’ Future - and Why They Should Give It Back by David Willetts. An excellent review of the latter can be found here.
All grist for the mill in the project we are developing on ageing, entrepreneurship and sustainability, with the first brainstorm to be hosted by Accenture on 3 March. A central point made by Willetts is that there is now “a breakdown in the balance between the generations.” How long, I wonder, before younger generations - and their champions - pitch their interests to the Baby Boomers in terms of human rights?
The address for this blog entry is: http://www.volans.com/2010/02/the-coming-clash-of-generations/.
- John ElkingtonBrilliant Ideas - Pepsi and the Business of Social Innovation
I was impressed to see Pepsi taking on a new kind of challenge – looking for ways to catalyze social innovation through their Refresh Everything Campaign. Social innovation is about implementing solutions that improve social and environmental conditions around the world – a grand challenge, but one that more and more companies seem to be stepping up to.
A friend of mine at IDEO tweeted a fantastic blog entry about Pepsi’s decision to NOT spend the big bucks on a 30 sec advertisement that would be aired during the Superbowl, but rather to find a different way of doing good and building their brand.
For anyone not familiar with the Superbowl, it is an annual event which happens every January and captures the viewing attention of a large population of North America. Often it is a sensational affair – from big celebrity concerts during halftime to wardrobe malfunctions and even a little bit of football thrown in for fun.
But many people watch the Superbowl for what happens between the plays – the advertisements.
Interestingly, a study by ad agency Venables, Bell & Partners showed that 66% of viewers remember their favorite advertiser from the 2009 Superbowl and only 39% recall which team actually WON the game.
So in an increasingly expensive and noisy time for high glamour marketing, Pepsi decided to invest the money they would otherwise spent on captivating viewers with an advertisement, and instead created a $20 million fund. This fund is designed to invest in people, businesses, and non-profits with ideas that will have a positive impact on US communities. Grants will be allocated based on an open vote – where posted ideas are considered and ranked by members of the public. Those with the highest number of votes will win grants between $5k and $250k.
As stated on the Weiji Blog ‘Moving away from the norm seems to have worked, in a recent survey by Nielsen, Pepsi’s ‘Refresh Everything’ campaign accounted for more than 21% of the media coverage and online buzz around Superbowl advertising. Given that PepsiCo usually spends in the region of $30m on Superbowl advertising breaking away from the norm seems to have paid off.’
Thanks Tom for highlighting this great example of social innovation at work!
The address for this blog entry is: http://www.volans.com/2010/02/brilliant-ideas-pepsi-and-the-business-of-social-innovation/.
- Charmian LoveThe Phoenix Economy, Take 2
A central theme in our 2009 report The Phoenix Economy was that the global economy was embroiled in something very different to a normal recession - and that the dynamics had more to do with the sort of deep economic and business cycles that economists like Nikolai Kondratiev and Joseph Schumpeter explored. At the time, even though many comparisons were beginning to be made with the Great Depression of the 1930s, we experienced significant push-back from people who felt we were exaggerating the risks. Well, maybe we were and maybe we are, but today’s Financial Times runs an article by Niall Ferguson that underscores the sovereign-debt-related risks now spreading out from Greece, rattling Spain and Portugal, sending tremors through the UK financial system - and very likely headed America’s way.
I have often used a slightly mutated version of a phrase I first heard many years ago, to the effect that “History may not repeat itself, but by God it rhymes.” I remain convinced that we are going through a period of what will eventually be seen to have been Schumpeterian creative destruction. The key question in my mind is whether we can find the vision, the political will and the resources to drive the processes of creative reconstruction that are so clearly needed.
With December’s COP15 summit signalling the dysfunctions of the current system of global governance in the face of the climate challenge, and the Obama Administration (flagged by the several hundred social and environmental entrepreneurs we polled for The Phoenix Economy as a key reason for hope) in disarray on a number of fronts, we can only hope that there is truth in what they used to say, that the darkest hour is just before dawn.
The address for this blog entry is: http://www.volans.com/2010/02/the-phoenix-economy-take-2/.
- John ElkingtonSpawning the Social Equivalents of Steve Jobs
I missed this when it first came out in the New York Times, but picked it up via Facebook today. Tom Friedman suggests some of the things Barack Obama should now do to revive his Presidency. Here’s a brief sample of the op-ed article:
“Obama should launch his own moon shot. What the country needs most now is not more government stimulus, but more stimulation. We need to get millions of American kids, not just the geniuses, excited about innovation and entrepreneurship again. We need to make 2010 what Obama should have made 2009: the year of innovation, the year of making our pie bigger, the year of ‘Start-Up America.’
“Obama should make the centerpiece of his presidency mobilizing a million new start-up companies that won’t just give us temporary highway jobs, but lasting good jobs that keep America on the cutting edge. The best way to counter the Tea Party movement, which is all about stopping things, is with an Innovation Movement, which is all about starting things. Without inventing more new products and services that make people more productive, healthier or entertained — that we can sell around the world — we’ll never be able to afford the health care our people need, let alone pay off our debts.”
The Rework the World site on Facebook already has comments about how we should define entrepreneurship here, but the spirit of this piece ticks so many boxes on our agenda it’s hard to know which ‘Categories’ not to tick on Word Press.
The address for this blog entry is: http://www.volans.com/2010/02/spawning-the-social-equivalents-of-steve-jobs/.
- John ElkingtonClean & Cool Mission on YouTube
Later in the month, we are part of a Study Mission to California and Silicon Valley, co-organised with Polecat and the UK Technology Strategy Board. An interview of principals of all three organisations covering the background and ambitions can be found on YouTube, here. This mission is a direct follow-on from our 2008 study, The Phoenix Economy, and links to many of our core interests around e.g. cleantech, investment, jobs and employment. And it is a great opportunity to meet and engage with the entrepreneurs and/or CEOs of 20 leading enterprises tackling challenges related to the broader sustainability agenda.
The address for this blog entry is: http://www.volans.com/2010/02/clean-cool-mission-on-youtube/.
- John ElkingtonTellus Mater Foundation Supports Volans
Volans has received a grant from the Tellus Mater Foundation to seed fund the Pathways to Scale Program; and support a year-long project to explore how entrepreneurs are mainstreaming the protection of natural ecosystems into the prevailing economic and business paradigm. The work will build on elements of the research The Phoenix Economy, which we published in 2009. 
The project will identify and work with today’s pioneers—scientists, activists, business leaders and progressive investors—whose metrics, technologies and business models are advancing an economy that takes into account the services provided by ecosystems. Through surveys and research, it will explore the success stories for these models, identifying them as prototypes of tomorrow’s economy, creating awareness of the barriers they face to scale, and helping them increase their influence with key stakeholders, such as business, investors and government policy-makers.
A number of strategic partnerships are being put in place with international bodies, foundations and research networks to multiply the impact of the work. We are grateful for the foundation’s support and look forward to this exciting project in 2010.
The address for this blog entry is: http://www.volans.com/2010/02/tellus-mater-foundation-supports-volans/.
- Alejandro LitovskySituational vs. Sustainable Values
I really like this piece by Tom Friedman, finding the distinction between situational and sustainable values both insightful and helpful.
The address for this blog entry is: http://www.volans.com/2010/02/situational-vs-sustainable-values/.
- John Elkington