SOPHISTICATED FINANCE

FIU Workshop on Growth Strategies for Businesses

I will be doing another workshop for the Pino Entrepreneurship Center at FIU on February 2. This 8 hour workshop is entitled "Developing a Killer Business Plan", but more specifically it deals with how to develop the growth strategy for your business concept. The concepts presented closely follow my book--Billion Dollar Company: An entrepreneur's guide to business models for high growth companies. The book website, which includes an excerpt from the book, is here.

My style in workshops is that of a practitioner, with over 30 years of stories and cases from around the world to illustrate the points. In a practical, usable way I try to combine academic theory and industry practice in cohesive, step-by-step methods to solve the common problems of startups and high growth companies.

Registration details are here. Proceeds go to the Pino Center.

 

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Validation--Prediction 3

This the last in my series of predictions. The first two posts are:

• It's the Volume of Information-Prediction 1
• The Future of Education-Prediction 2

In the first post I made a statement on the volume of information:

"Not only are we creating more information but the exchange of this information is accelerating"

Part of the reason that information exchange is accelerating is that the technology now permits it to become "viral" (nothing new here). However, not all networks behave in a viral way similar to an epidemic. Networks are built on nodes and how the nodes interact with the network may be better explained by game theory. An interesting article in Nobel Intent explains how nodes work.

"a network with a lot of connections between people increases exposure and then adoption, as do links stretching between dissimilar groups. When the trend in question spreads to a node with a lot of connections (like a celebrity), its popularity explodes. While this is fitting for some cases, in others it's an oversimplification—a person's exposure to a trend doesn't always guarantee they will adopt it and pass it on.

"It is not only the intrinsic value of a new technology (or other types of innovation) that makes it attractive. It is also the number of friends who have adopted it," Amin Saberi, one of the authors, told Ars. In instances where there is incentive to make the same decision as people around you, the authors of the paper argue, the spread of innovations may instead follow rules of game theory, which differ in big ways from the rules of viral or epidemic trends."

The notion of an incentive in decisionmaking brings us to the question of validation. Everyone is focused now on just creating the social networks. When all this information starts bombarding us there will be more than a need for just information capture through a Facebook or organizing the information through a Rockmelt browser. I think one of the very big opportunities for new business will be in validating data and information.

An example may clarify. Some people check the traffic each morning before they leave for work. Maybe they listen to the radio, check Google street view or Twitter or use another source. However, every source of information is independent and not integrated with another source and every source is at a different point in time. It is quite a challenge to integrate all the data sources, adjust for time differences and come to a valid conclusion.

An additional complexity is that not all of the sources of information are equally credible. The chart below shows the credibility of different sources of information. (Source: Edelman Digital)

Note that trust in our friends is declining, which suggests to me that as we increase the interactions with our friends through social media we are finding them less credible. Note also that college professors have the highest credibility...so you should believe what I say here :)

Now to the business opportunities in validation:

1. I think there is a big opportunity to integrate different sources of data to improve the overall quality of the information. This story about IBM and NATO illustrates the work being done on integrating data
2. I think there is an opportunity to provide greater credibility to search results by providing richer detail on who has viewed a page result. A link on global warming that was viewed by 400 scientists would probably be a more attractive source than a link viewed by 400 government officials, according to the Edelman index above. To have any comments made by the scientists on the page would be richer yet (think of the Zemanta "related articles" feature)
3. While the federal and state governments are very advanced in providing historical information, they are quite weak in providing real time information from their various sources in all the formats (audio, image, video, etc.), such as police, firemen, environmental officials, etc. Tapping into these confirming sources of information and then integrating it (1 above) with public information, without being arrested, is another interesting business opportunity

Of the three predictions, validating information is the most interesting to me and I plan to come back to it in future posts.

 

 

 

Passion

This is the third in a series of posts defining the three characteristics of successful entrepreneurs:

1. Focus
2. Discipline
3. Passion

Focus and discipline are defined here and here respectively. Today's post is devoted to "passion".

The Merriam Webster dictionary defines passion as:

 Intense, driving, or overmastering feeling or conviction

I would define passion as:

Intense, enduring motivational feeling or conviction

Enduring expresses the idea that passions are not fleeting.The insertion of "motivational" captures the notion that passions bring about actions. There is no passion without acts that demonstrate it. Conviction as opposed to "belief" demonstrates the "certainty" of passion.

All three characteristics of the entrepreneur are important, but passion is what sustains one in the challenges of a startup and insures the time and energy for discipline and focus to produce the desired results. The wisdom in entrepreneurship is in knowing when to use discipline and focus. Passion brings about action but discipline and focus put it on the correct path.

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Discipline

In yesterday's post I defined "focus", one of the three characteristics of successful entrepreneurs. (The "focus" post is here.) The other two characteristics are:

1. Discipline
2. Passion

Today I will define discipline.

The Merriam Webster dictionary defines discipline as:

" orderly or prescribed conduct or pattern of behavior"

I think this definition is almost correct but it has a certain "military" flavor to it that may not be instructive in a business setting. I would define discipline as:

A systematic and routine approach to properly complete a task

"Systematic" captures the step by step approach inherent in discipline. "Routine" implies that the behavior can be repeated and is not a "one off" event. "Properly" suggests that there is a correct way to do something. Discipline applies to a wide range of behaviors from sitting properly in a chair to weight lifting or solving math problems. 

I think that many people lack discipline not because they lack will power or focus. I think many people lack discipline because they do not recognize that a discipline can be applied to a situation or problem. One of the shortcomings in education is that we teach disciplines such as discounted cash flow or marginal cost but we do not devote enough time to helping students identify the situations where the discipline can be applied. I think one of the clearest signs of intelligence is the facility to recognize a situation where a discipline can be applied. When one sees a problem, first look to see if there is a discipline that applies to solving it. More often than not there is a discipline.

A reader wrote me on yesterday's post about "focus" and asked if focus and discipline were not the same thing. Focus is about the singularity of the goal and acting consistently to achieve it. Discipline is a toolset that leads one to select the correct options and achieve a productive focus.

Now I have to go load the dishwasher, which according to my wife involves a discipline. See--everything has a discipline.

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Sophisticated Finance: Right NYT: Wrong on Kindle

In the New York Times today Nick Bilton acknowledged that he was wrong in predicting the demise of the Kindle. The Kindle is now the best selling product in the history of Amazon, having surpassed a Harry Potter book (according to Mr. Bilton).

I would humbly point out that I correctly predicted the continuing success of the Kindle in this post from July 20, 2010. The accuracy of my prediction was based on the view that:

"Computing is moving to specialized devices, such as the Garmin GPS, the iPod and the Kindle"

I continue to believe that this view is correct and that many more new business opportunities exist in the field of specialized computing devices that better match the customer need. Logitech's new Harmony, which provides one touch remote control of a reportedly 225,000 devices might be another example. I doubt a smart phone app can control 225,000 devices and the phone still download a video.

In fairness to Mr. Bilton, he makes many predictions and I only opine on the future occasionally (10-20 posts per year). Anybody can get one prediction right :)

 

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Related articles

• Amazon Says Kindle Best Selling Product Ever (informationweek.com)
• Amazon: iPad owners buying Kindle, too (intomobile.com)

Focus

My friend @johnfleming sent me a link to a Seth Godin post on focus. In the post Seth said:

"Focus involves eliminating options until you have so few moving parts that work

actually gets done."

Focus is one of the three key qualities of almost all successful entrepreneurs. The other two qualities are:

1. Passion
2. Discipline

Obviously these three characteristics make for success in many other fields but are particularly important in entrepreneurship.

Many words in business are used frequently but rarely understood. "Marketing", "empowerment", "collaboration" and "focus" might all be examples of terms that are used but rarely defined correctly. Seth's definition of focus captures the concept of options, which I think is an important part of focus but I think there is a better way to look at "focus", as described below.

Focus is the consistent exercise of options that move one toward a goal.

I think this definition is more constructive and actionable. Eliminating options does not necessarily lead to anything. I think I will define passion and discipline in the next posts.

A related story on simplicity and elegance is here.

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Re-thinking U.S. Defense Strategy

Dwight Eisenhower, 34th President of the U.S. and Supreme Allied Commander in WWII, coined the phrase "military-industrial complex" in the early 1960s to explain defense spending in the U.S. Despite his powers as President and knowledge of the subject, he was unable to curb defense spending or rationalize it.

The U.S. approach to terrorism, categorized by some as "find the bomb", involves a huge investment in technology and hardware. This approach reflects the U.S. thinking of the military-industrial complex. The Israeli's, constrained in part by capital availability (and a longer history of dealing with terrorism), use the "find the terrorist" approach. Such an approach involves much less investment in infrastructure and the use of cheaper infrastructure.

I believe that we have to keep the U.S. safe from terrorism, but I think we need to use a more capital efficient solution that questions whether the military-industrial complex approach is still the best approach. Washington is extremely slow to propose new approaches to problems.

The following reading also leads me to conclude that now is the time for a real dialogue on future U.S. defense strategy:

• Conflict or Cooperation, from Foreign Affairs, which discusses three alternative approaches to the emergence of China as a world power
• How America Will Collapse (by 2025), which describes four possible outcomes to the emergence of China
• A New York Times review of the book Why the West Rules--For Now, which questions the U.S. approach to China's emergence
• The American Interest: The Crisis of the American Intellectual

At the risk of being categorized as a mindless liberal, I have also read several books on military strategy in the 21st century. These books generally discuss strategies for fighting the war with China that the liberals generally believe is inevitable....unless Washington changes its approach.

The gloomiest strategic outlook is that we go to war with China and we do not know the reason, similar to the invasion of Iraq and probably Vietnam. Except for preserving our democracy or stopping "crimes against humanity", I do not think a war with China could be justified. Preserving our "way of Life" (Judeo-Christian beliefs, economic well being, individualism, etc) is not sufficient cause. Continued high level military spending will be unaffordable as the U.S. economy most likely goes through severe adjustments for the next ten years. Preparing for such a war using "military-industrial complex" thinking is no longer economically feasible.

The challenge in this position, as every student of history knows, is to not fall into the trap of appeasement. Such an approach doomed Chamberlain with Hitler and most likely would not work with the government of China. (I am not comparing China to the Nazis, but the most recent monumental failed strategy of appeasement involved Hitler.) So to avoid a war and not fall prey to appeasement, recognizing that financial resources will become more limited, this is what I propose:

1. We need to secure an uninterrupted supply of necessary commodities from Latin America, which could service the U.S. by land if necessary.
2. We need to eliminate the need for oil supplies outside North America and preferably also reduce oil consumption significantly by substituting solar and wind as much as possible (bombed nuclear reactors are a problem)
3. We need to form an alliance with key Asian countries and Russia as a counter balance to China; such an alliance will require significant economic support to these countries, which could be paid from more capital efficient military spending
4. We need to stop fighting expensive local wars such as Iraq, Somalia, etc which drain the human and economic resources of the country; Afghanistan was justified when it started but it should have ended more decisively a long time ago.

It should also be pointed out that China has an equal responsibility to avoid conflict. Their challenge may be even more complex than for the U.S. Centralized government, emerging military power and nationalism and increasing demands for political rights coincident with economic development suggest China's decision making is even more complicated. With China's lack of experience as a super power, their ability to successfully face these challenges is still to be determined.

I think we need a national dialogue on the topics in this post. We have 10-20 years to prepare for the emergence of China as a full fledged super power and the old thinking in Washington does not look to me as an attractive approach to the issues. Share your thoughts in the comments.

 

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A Lesson in Social Entrepreneurship

A friend told me this story that illustrates one of the great challenges in social entrepreneurship-how to combine the "do good" with operational efficiency. Here's the story about a new CEO of a non-profit animal shelter and his staff.

CEO: We have to control the cost of animal food and measure every serving

Staff: (Blank look) Why?

CEO: We need to measure the food so we don't overspend on animal food

Staff: (Blank look) No verbal response

CEO: We need to measure the animal food to be sure we do not under feed the animals

Staff: That's a great idea! We will start immediately

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Happy Holidays

 

Certain Truths are Inevitable

"The Universe is a grand book which cannot be read until one first learns to comprehend the language and become familiar with the characters in which it is composed. It is written in the language of mathematics."  Galileo Galilei

Some further, perhaps more practical thoughts on mathematics and mathematics education are here. 

Quote: Source

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Cash Cow Disease?

Business Insider had an interesting article today entitled "Cash Cow Disease: The Cognitive Decline of Microsoft and Google" which was also picked up in some of the finance blogs. In the article BI states:

"Cash cow disease arises when a public company has a small number of products that generate the lion's share of profits, but lacks the discipline to return those profits to the shareholders."

Google and Microsoft are cited as two companies suffering from "cash cow disease". Each company gets a significant portion of revenue from one or two products and instead of returning excess cash to shareholders, they have squandered significant sums on failed new product introductions and acquisitions according to BI. Some commentators have gone so far as to say that Microsoft should be broken up into several different companies based on lines of business in order to realize its full value (which is understated do to losses in certain lines of business).

While I am all for shareholder returns and improving return on assets, I disagree with BI for the following reasons:

• A public company should only produce the performance and levels of return that the shareholders expect and reinvest any excess cash flow in future growth opportunities; as long as the shareholders are satisfied as evidenced by an appropriate appreciation in stock price, concerns about excess cash are nonsense
• Both Microsoft and Google need cash to make strategic acquisitions in order to remain competitive and to fund internal development of new products and lines of business; criticizing Google and Microsoft for failures in both areas is really to criticize management for their lack of expertise in integrating acquisitions or in their ability to identify new market opportunities; again excess cash has nothing to do with the analysis
• Google publicly states that they let the market (consumers) decide if new product ideas are viable, as stated in this previous post; Google only expects 1 in 90 new ideas to succeed and that ratio is presumably priced into the stock

When one looks at the comparative stock performance of Google and Microsoft over the last five years (shown below) one sees two very different results, which might suggest that to lump Google and Microsoft together is questionable. Google's stock price has appreciated over 400% but Microsoft has shown little increase in value. The market appears to be endorsing Google's management and their strategy and to be skeptical (at best) about Microsoft's future performance under current management (with the current strategy). The market appears to be ignoring "surplus cash" in both cases and I would also. 

 

Chart source

Eventually I need to write a post on what Microsoft's strategy should be (in response to several reader requests), but for today I will limit my remarks to a reply to BI.

Another take on the BI story is here. Less financial and more strategic.

 

 

 

  

Relax the Assumption--A Source of Innovation

I generally work on writing my books in spurts and Christmas/January is one of those periods each year. I hope to finish my second book by the end of January. This book deals with social entrepreneurship and lessons learned from One Laptop per Child. My first book dealt with business models in entrepreneurship (reminder: a great choice for Christmas gifts for your 100 closest friends). An odd thing happens to me whenever I am getting toward the end of a book--I come up with the idea for the next book. The remainder of this post deals with the concept of my third book. 

For the last five years I have taught entrepreneurship at FIU and each year I try to improve the course. My efforts for improvement always focus on the beginning of the process and formulating the new business concept. I have become a dedicated student of creativity, innovation and design as a consequence of what is now a near obsession with better understanding innovation. Talking with a friend recently I realized that I was effectively trying to teach my students to be geniuses--probably too lofty a goal. However, in this quest I developed a way to help the students develop creative new business ideas. This approach is easy to understand and many students have tried to use the approach. This is in contrast to many other pedagogical devices to teach innovation which the students barely understood and never tried to use.

The method works equally well for problem solving and to develop innovative ideas. The simple method is called "relax the assumption". Identify the key constraint in a problem or product and relax it. For example, relax the key color assumption about Henry Ford's black Model T and several new businesses come to mind--custom colors, custom car painting, car accessories, maybe even garages. Another example: software applications resident on PCs. Relax the assumption about the app resident on the computer and you might get cloud computing, software-as-a-service, video distribution, browser-based applications, etc. In my experience the harder the problem the better this technique works. I also have some examples of this approach used by famous entrepreneurs.

Now this idea may appear so simple that you wonder how I could write a book about it. First I write short books :) Second there are some great thinkers whose ideas I put together to arrive at this simple method. Working at OLPC also helped with the evolution of this technique. Those MIT people inspire one.

A previous post on a related subject is here. Comments welcome.

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Another Outsourcing Example--Equities Trading

Given my fondness for outsourcing and related stories (and a lot of posts here, here, here and here) it is not surprising that a reader sent me this story from CNBC--"Day Trading Still Alive-Outsourced to China". The story discusses stock trading by Wall Street firms using staff based in China. The Chinese staff are trading the U.S. equities market during U.S. business hours. 

I was initially a bit surprised that the lower staffing costs made any significant difference to the bottom line of a large trading operation. Then I realized a more interesting point. The Wall Street firms see no appreciable difference in the quality of the traders in China and the U.S. I traded big positions for years and traders are typically not well educated, intellectual types. Successful traders understand the fundamentals of their securities but are similar to good poker players. Minimize losses, be patient and bet big when you know you have the best hand. You do not have to go to HBS to learn this strategy.

I think that the Wall Street firms will "outsource" many more jobs to Asia. Modeling and credit analysis are the next obvious candidates. These jobs perhaps require more training than trading, but they are not rocket science. If I was a young person interested in finance and not losing my position to outsourcing, I would study advanced mathematics and go to work for a hedge fund. The more complex the trading strategies the lower the risk of being outsourced. As financial markets slowly return to normal, derivatives will again regain their pre-eminent position in finance and the future of finance. With the return of derivatives will come the return of jobs in this area especially with the hedge funds.

In 1995 I came to the conclusion that in the future all finance would be based on derivatives. The financial crisis of 2008 probably proved my point.

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The Future of Education-Prediction 2

This is the second in a three-part series of predictions. Link to post 1 is here.

"The schools are run by "professors" (the very definition of a school). The professors teach according to the prescribed programme. The programme is prescribed by authority. Is this authority in touch with life? Occasionally only. Is life a programme? No, life is explosive." Le Corbusier 1935 Source: Design Mind

I think a lot about education. This is in part due to my involvement with One Laptop per Child, my teaching at FIU and a belief that better education is the best way to solve the world's problems. All of the views that follow are my personal views and do not reflect the views of OLPC, FIU or any of my clients.

Worldwide the form of education has changed little since the 1800s. The teacher stands in front of the class and "pushes" the assigned curriculum at the student, usually in one form of presentation--voice. The better model is the Piaget inspired model where the student pulls the information in their preferred form and the teacher becomes more of a guide or mentor. This approach has made only limited head way as a universal approach to education for a wide variety of reasons. However, the emergence of widespread web connectivity and recent initiatives in online curriculum present the opportunity to change education dramatically toward a Piaget inspired model 

Some of the most noteworthy experiments in education on the Web include:

• Khan Academy
• MIT Open Courseware
• UN initiatives in online learning
• Collection from "better" universities

There are another thousand initiatives around the world that I have not mentioned. The fact is that the highest quality courses, especially in math and science, are now also available on the Web.

The proliferation of high quality courses online is leading us toward the Piaget inspired day when students (and parents) will pick their courses and the method of instruction. Within 10-15 years most students may no longer attend physical schools but instead will pick their curriculum from online offerings. What does this mean:

1. Online courseware will be extensively rated by users and third parties
2. Teachers will still exist as optional mentors, but they will be affiliated with course providers and probably paid by the students directly
3. We will need a new type of agency to confer degrees starting with elementary school and continuing through university to reflect the varied sources of course content available to the student
4. The number of surviving schools will be much fewer, with the best schools offering a totally different educational experience and lesser schools focusing on offering schooling to younger students (e.g. community colleges will compete for high school students)

The missing ingredient in this 1984 view of education is the social experience provided through physical schools. However, the younger generation will solve this problem using the social media technology they are so fond of. I am also not sure how school sports will evolve but maybe we will have "baseball" and "football" schools just like in the Dominican Republic.

Prediction 1 is here.

My new book, Billion Dollar Company: An entrepreneur's guide to business models for high growth companies, is available on Amazon. Learn the fourth strategy Michael Porter should have included, how to determine if a market opportunity is large enough to interest venture capitalists and how product differentiation is more than just a feature set. Book website.

 

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Three Holiday Gifts for the Geek and Geek at Heart

I am being swept along by the holiday spirit and am looking forward to some down time soon. Everybody is publishing their list of recommended gifts and so I have carefully and thoughtfully prepared a list of gadets,fashion wear and books for my discerning readers to consider.

First up in the gadget category is the Air Hogs helicopter video camera. This remote-controlled helicopter really flies and it has a camera for taking videos. A USB cable is used to download the images (after the helo lands). How can you not like a product called Air Hogs!

In the fashion category we are recommending Android wear. You can talk the talk about open source software but now you can walk the walk. Two samples are shown below and more are available here (click on "wearables" on the left for more selections). Now you can take down that yellow police tape in your office that says "Microsoft Free Zone" and still make a statement.

In the book category, as the perfect gift for the aspiring entrepreneur or the old salt that needs some stimulation to grow their business.....drumroll..........Billion Dollar Company, available on Amazon. The seven book reviews are here. Send me the books and I will autograph them in time for Santa to pick them up. The autograph will add considerably to the collector value of this soon to be classic.

 

 

The Phone as Emergency Device

We all think of our cell phones as emergency devices. Get in trouble and call for help. A story in Business Insider illustrates another use for the phone in an emergency. A high school basketball coach followed the CPR instructions on his iPhone app to resuscitate a student..and probably saved his life. As the coach pointed out, even with training in CPR you get rusty and the app reinforced his previous training.

Would be a nice social responsibility project if someone like J&J or Merck would develop a complete first aid app for all cell phone platforms and make it available for free.

One other point. Everybody should have a listing in their cell phone contacts titled ICE--In Case of Emergency. First responders are taught to look for this listing in case of an emergency and contact that person.

 

It's the Volume of Information-Prediction 1

I have been really bored by the "predictions for 2011" posts this year. I do not need to hear anymore about cloud computing, collaboration or social media for the enterprise. Those ideas were interesting in 2008 but not today. At the risk of also being boring, I have three posts planned which include a bit of prediction. The themes are somewhat related and are listed below:

1. The overpowering volume of information
2. Education
3. Validation

This post covers the deluge of information.

First let's set the stage. Steve Jobs in a Wired interview said:

"The world's getting worse. It has gotten worse for the last 15 years or so. Definitely. For two reasons. On a global scale, the population is increasing dramatically and all our structures, from ecological to economic to political, just cannot deal with it."

Nothing new here, but the world is going through one of its periods of exponential growth with China and perhaps India emerging as developed countries. This emergence is stressing everything--the environment, financial markets, political structures, etc. This growth, supported by the new IT technologies, is creating information at unheard of rates. However, as Paul Kedrosky correctly points out in Infectious Greed, we have passed through the "age of too much information" and are now in the "age of viral information" and here in lies the problem. Not only are we creating more information but the exchange of this information is accelerating. 

Nassem Taleb, author of the Black Swan, brings these thoughts to the correct conclusion:

"Connectivity and operational leverage are making cultural and economic events cascade faster and deeper. Anything fragile today will be broken by them." 

The volume and pace of information exchange has surpassed the current systems of governments and other authorities to monitor and react. The financial crisis in 2008 was not caused by just bad financial engineering but also by the fact that market participants had better information systems than the regulators and reacted much more quickly.

Two examples show recognition of my point.

1. The central bank of a distressed European country is now in the process of rebuilding all of its information systems. 
2. The UN has announced a major new initiative to capture worldwide information in real time on natural disasters and make it available to affected governments.

The fearless predictions:

1. Governments will have a tremendous need for better real time information and monitoring systems with a focus on integrating data from a wider range of disbursed sources
2. Once these systems are in place, decision making will need to be decentralized in order to speed up response times
3. Decentralized decision making will require a new form of government with the bureaucracies replaced by stand alone agencies (e.g. TVA) or private sector enterprises with responsibility to respond to disasters (whether they be natural, terrorist or financial)

Chances that any of this will happen--zero! Re-thinking government in the age of viral information is too complex an issue for today's politicians and government dignitaries to grasp. That is why I think it is such a big opportunity for the private sector.

My new book, Billion Dollar Company: An entrepreneur's guide to business models for high growth companies, is available on Amazon. Learn the fourth strategy Michael Porter should have included, how to determine if a market opportunity is large enough to interest venture capitalists and how product differentiation is more than just a feature set. Book website.

 

 

 

Outsourcing the Foundation

One of the challenges of any not-for-profit foundation is achieving meaningful scale. Most models for non-profit activity do not anticipate or allow the organization to scale. That may be why we have over 1.5 million non-profit tax filers in the U.S., or 1 for every 4 tax paying corporations.

The problem for the non-profit with no scale is three fold:

1. The organization makes a very small or localized social contribution
2. Overhead and administration takes up a significant part of financial resources
3. The organization is challenged to build a full-time, professional management team

In the case of corporate foundations the solution may be to outsource the management of their foundation. Here is how it might work. The corporation finds a large, international foundation with a similar focus-health, education, hunger, conservation, etc. The corporation commits their social responsibility budget for several years exclusively to the foundation(s) with the same purpose. The foundation provides quarterly reporting to document that the funding was used in accordance with the original understanding. The foundation agrees to include the corporation in all of its publicity and marketing materials.

This idea is really not so different from Warren Buffett entrusting his fortune to the Gates Foundation. Anyone interested to outsource the management of their educational foundation should contact me.

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