SOPHISTICATED FINANCE

World Water Shortage--New Map

Back in January 2011 I wrote one of my New Business Ideas posts on the opportunities in food and water due to the impending shortages of both. Today in Co.Exist there is an article highlighting a map from the World Resources Institute that shows the severity of the water shortage. The map is called Aqueduct and it allows the user to change the factors considered such as ground water and pollution.

 

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Great Book on Design

By Milton Glaser

Over the last few years I have become a student of design. I think it is the closest discipline to entrepreneurship and many principles of design are directly applicable to new business development. I have been reading Debbie Millman's new book, "How to Think Like a Great Graphic Designer " in which she interviews many of the great graphic designers of the late 20th century. Several designers defined design as the combination of strategy and intellect. Interesting that they omit art or creativity in the definition. Also noteworthy is that so many graphic designers moved on to do architecture and product design. The chapter on Milton Glaser is perhaps the best. The intellect of the man is quite exceptional.

An up and coming graphic designer who I know is Patti Murphy. Her website is here. I should send her the book. Every young person interested in design should read the book.

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PDF to Excel

Have not written anything on Excel in a while despite the continuing popularity of previous posts. For example, Googling "startup Excel model" brings up this post from SF as the first choice.

Today I received an introduction to PDFExcel, a product that converts PDF files to excel format. Very useful tool. Check it out here. 

A collection of all my ever popular Excel posts is here.

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Yunus' Ideas Raise Questions

Project Syndicate has an interesting article from Mohammed Yunus--"The Social Business Revolution". Yunus is a Nobel Laureate who was responsible for popularizing micro-finance in Bangladesh through Grameen Bank. 

Yunus' argument goes as follows:

1. "The persistence of many of the world’s social problems reflects our collective misinterpretation of the idea of capitalism"
2. "As a result, businesses are run for the sole purpose of maximizing profit, and humans are conceived as one-dimensional money-making machines"
3. "There is a missing component in our conception of the economic marketplace: social business"
4. "A social business is a non-dividend-paying company whose entire purpose is to solve a particular social or environmental problem. Shareholders can recoup their initial investment over time, but nothing beyond that. All profits are plowed back into the company to increase its reach or to improve the product or service that it provides"

My comments on Yunus' argument are as follows:

1. One financial crisis is perhaps not sufficient evidence that capitalism has gone awry. Secondly, capitalism has a long history of recovering from financial crisises and then producing considerable social benefits
2. The concept of a social business as defined by Yunus has two shortcomings:

• The scale of "social businesses" to solve problems would be greatly increased by access to traditional financial markets (which is not possible in the "no return" model proposed)
• The size of the pool of funds for investment with "no return" is very limited which suggests that it would not have much impact in terms of scale to solve the big problems

I think the better question for Yunus to consider would be why profit making companies devote so few resources to solving social problems. Most shareholder owned companies could devote much more money to social issues without any dramatic decline in share value. Despite the clarity of the writing of  Milton Friedman and others, maximizing shareholder return is still subject to interpretation.

@John_Menezes sent me the article. 

 

Social Entrepreneurship vs Corporate Social Responsibility

Yesterday in my IAP course on social entrepreneurship at MIT Sloan a student asked an interesting question. He asked:

"Should I be a social entrepreneur or an entrepreneur who supports corporate social responsibility?"

My approach to teaching social entrepreneurship is to emphasize entrepreneurship and look at the poor or disadvantaged as a market. This logic parallels the thinking and writing of CK Prahalad, who popularized the phrase "the bottom of the pyramid". (More on Prahalad is here.

My answer to the student was to "follow their passion". Entrepreneurship in all forms requires a passionate founder who overcomes to achieve the objective. Passion is what sustains the ongoing effort. If the passion is to help children or help the disenfranchised then one probably chooses social entrepreneurship. If one is more oriented toward solving a big problem or growing a big company then one probably opts for entrepreneurship with corporate social responsibility.

Observations on MacBooks and iPads.

Over the last few years I have come to believe the following statement: "not everybody who uses Macs is smart, but everybody who is smart uses Macs". Last week at CES in Las Vegas, of the hundreds of attendess I observed using laptops or tablets, I saw one person using a Windows laptop (although it could have been a Linux machine :)) . CES was like a "Windows free zone" except for the Intel booth. I am sure there were a few more Windows machines but I did not see them being used by attendees.

Another observation is that early adaptors of the iPad are switching to the MacBook Air for their daily computer and using the iPad less. I am in that group. I only use the iPad for book reading and presenting. See this post for why I present with a tablet.

I also think the iPhone may be declining in popularity amongst early users. Saw a lot of people at CES who had an iPad or MacBook and a Samsung Galaxy smart phone. I think the quality of integration with Google services is leading people to high end Android phones. 

BTW--have not seen many Windows machines amongst MIT Sloan students this week. Apple all the way.

Thoughts on CES 2013

I have just returned from a week at the CES show in Las Vegas. I think it was ReadWriteWeb who first caught my attention by saying this year's show would be a "me too" show--not much new! I agree. I did not see much in the way of breakthrough ideas. Much the same as last year, which I described in this post from a year ago. 

Most popular attraction at the show was about eight helicopters flying around a booth, all controlled by tablets. Brookstone, among others, sell the helicopters.

Car manufacturers and their accessory providers took a huge amount of the space at the show. Connectivity in the car for devices was a big theme. Ho hum for me.

The show was tablet mania with everybody showing 7" tablets running Android. Almost nobody had any new thinking on tablets. Most companies focused on price and a few focused on better performance due to better specs. Starting to see licensed tablets, such as Hello Kitty, Flintstones, etc. Seeing some evidence that people are giving up their iPads for Android devices. Better integration with Google, longer battery life, ease of sharing and flexibility in storage/backup might be the reasons. Also, Apple has done nothing noteworthy in the last iPad or mini-iPad release. 

Two statistics caught my attention:

1. From my friend Michele Borba (@micheleborba), 37% of 2-4 year olds in the U.S. have used a tablet
2. Children are giving up physical toys (e.g. blocks) at an earlier age due to tablet usage

Implications for the U.S. school system are noteworthy. Maybe schools will have a BYOD policy for kindergarten. 

 

 

 

 

Thoughts on Creativity

For a variety of reasons lately I have been thinking about the concept of creativity. Quite a wide range of great thinkers all describe creativity as a process based on discovery. In other words, creativity is not creating but rather discovering something new. We all have perceptions and experiences which when put through an appropriate process foster the discoveries that produce the new ideas--creativity. Such luminaries as Plato, Cezanne, Van Gogh and Einstein, to name a few, all share this view of creativity as a process of discovery.

The question that you should now be asking yourself is "What prompts the discovery process?". The simple answer is curiosity--the most natural instinct of all and shared by all of us from a very young age. So if your schooling did not kill off your curiosity you are well on the road to being creative. (I will avoid the temptation to turn this post into another article on education.)

The other key ingredient for creativity is the process one uses to analyze their perceptions and experiences. Here again many genius level thinkers (Einstein, Hamming, Minsky to name a few) provide the answer. One can learn the process, especially by studying the great thinkers. Alternatively, or perhaps in parallel, one could develop the ability to think critically. Critical thinking is the foundation for creativity. Critical thinking is defined here in this article on training young entrepreneurs. (If you have read this far then the critical thinking process is probably/hopefully engaged.)

 In a post on Brain Pickings today there is an interesting article on creativity--Chuck Close on Creativity, Work Ethic, and Problem-Solving vs. Problem-Creating. The best quote from the renown photorealist is:

 “Inspiration is for amateurs — the rest of us just show up and get to work.”

The other good quote from Close is:

"And the belief that process, in a sense, is liberating and that you don’t have to reinvent the wheel every day. Today, you know what you’ll do, you could be doing what you were doing yesterday, and tomorrow you are gonna do what you did today, and at least for a certain period of time you can just work. If you hang in there, you will get somewhere."

Suffice it to say that Close recognizes the critical role that processing plays in creativity.  And....no more excuses about waiting for inspiration.

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What Forbes Missed in the List of the Most Powerful

Forbes released today their list of the most powerful people in the world today--71 people out of a total world population of 7.1 billion or 1 in 100 million. Generally the list highlights politicians (Obama #1, Angela Merkel, Chancellor of Germany, #2) and business people (Bill Gates #4, Carlos Slim #11). One segment of the population notably omitted is academics and intellectuals. Thought leaders apparently are a group that Forbes does not deem sufficiently powerful. 

Perhaps the President of Harvard, Drew Gilpin Faust, warrants a position given the number of people on the list who have strong ties to the university. Perhaps the historic and future contribution of the Harvard student body is a better reason. Using this logic, L. Rafael Reif, President of MIT, would deserve to be on the list. He might also deserve to be on the list given the 60 Nobel Prize winners that are either faculty or in some other way affiliated with MIT. Thoughts on public intellectualism are here and here.

Other groups noticeably missing are:

1. Large hedge fund operators, e.g. George Soros
2. Scientists, e.g. Stephen Hawkings
3. Writers, e.g. certain Pulitzer Prize winners
4. Religious leaders, e.g. Billy Graham (although Pope Benedict XVI ranked #5)
5. Nobel Prize winners excluding politicians (835 individuals since 1901)

Add other notable groups missing in the comments. The complete list from Forbes is here.

 

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