David Brooks wrote a great op-ed in the New York Times this week about impact investment. I think he’s right that it’s one of the most interesting and exciting sectors to work in at the moment. He contrasts it with working in finance or government:
“The big debate during the 20th century was about the relationship between the market and the state. Both those institutions are now tarnished. The market is prone to devastating crashes and seems to be producing widening inequality. Government is gridlocked, sclerotic or captured by special interests. Government is an ever more rigid and ineffective tool to address market failures.”
Of course, they’re both still important, but neither is growing or really capable of radical innovation. Certainly watching where smart people go after university or after they’ve been working for while, they’re heading towards social ventures or impact investment in much greater numbers.
Initially I have to admit when people told us what we were doing with BGV was impact investing, I was a bit resistant to join a bandwagon. In the UK it’s been called social investment but now is usually called impact investing or social impact investing. The one problem here is that some people see it as just a way of funding existing charities. That’s important too but is only a fraction of a percent of the opportunity. There’s huge amounts of capital available and a vast reserve of talent that wants to help create the ventures. The challenge for impact investors is to bring those together in an intelligent and ethical way and then prove that it had a positive impact.
We shouldn’t jump in uncritically but it’s starting to look promising. As Brooks says:
“Impact investing is not going to replace government or be a panacea, but it’s one of a number of new tools to address social problems. If you want to leave a mark on the world but are unsure of how to do it, I’d say take a look.”
I’m not doing brilliantly on my resolutions. Dry January lasted until the 16th, almost all lunch places seem to think vegetarian must equal cow cheese (which I can’t eat) and I’ve missed a few days of blogging. I have stuck with the standing desk though. That’s been great.
Most successful BGV teams have founders with a range of different skills within the team, but it turns out just having diversity isn’t enough. This article in the New York Times highlights MIT research about what makes a successful team:
First, their members contributed more equally to the team’s discussions, rather than letting one or two people dominate the group.
Second, their members scored higher on a test called Reading the Mind in the Eyes, which measures how well people can read complex emotional states from images of faces with only the eyes visible.
Finally, teams with more women outperformed teams with more men. Indeed, it appeared that it was not “diversity” (having equal numbers of men and women) that mattered for a team’s intelligence, but simply having more women. This last effect, however, was partly explained by the fact that women, on average, were better at “mindreading” than men.
It’s all interesting stuff and I’ll come back to points two and three in later posts but the first one is something we particularly look for in teams.
This article about ‘Why I’m not a maker’ has created a bit of a debate over the last week because it highlights a horrible habit in the tech industry towards idolising a few skill sets over others. I think this comes from a psychological bias towards thinking that one thing will solve problems but that’s rarely true. The doers are vital, the thinkers are vital, the makers, the promoters, the connectors. Without any of these things a startup will fail. But a great team comes not just from a diversity of opinions and skill sets, but from valuing them equally and giving them all a chance to contribute.
Reading the news I find it quite difficult to work out whether we’re making progress as a species or not. Instinctively, I’m an optimist but sometimes that can be hard.
The UN Millennium Development Goals were an attempt to set goals and measurable targets around human development and then a programme of activities and funding to try and achieve them. I was involved in Jubilee 2000 at the time and I remember thinking that they were pretty ambitious for just 15 years in the future. Although the target date is actually later this year, we’ve actually achieved quite a few of them.
According to the Economist this week, the follow up process to set goals at the UN for 2030 is a complete mess. However that hasn’t stopped some people being optimistic about the future. Bill and Melinda Gates set up their Foundation in 2000, the same year as the MDGs were written. Looking ahead in their annual letter last week they outline their ‘big bet’ for the future:
The lives of people in poor countries will improve faster in the next 15 years than at any other time in history. And their lives will improve more than anyone else’s.
I know there are many terrible things about the way the world works but I wouldn’t bet against them on that one.
There are many niggly things I hate doing. These range from things that are just a bit awkward (needing to move a meeting) through to things that have a few steps (arranging a trip) or things that involve bureacracy (tax return!). It turns out there are even more if I don’t do them.
The way I’ve developed of dealing with these is to create a little list on the notes app of my phone each morning (actually I often start it on my way home the day before). It just has the name of the day and then three niggly things that I could do that day. It’s not urgent or particularly prioritised — it’s just things that I know I need to do at some point and I don’t like doing.
Then I try to get them done before I have a coffee at 11am. Turns out if you do a few each day, niggly things are less niggly.
Yesterday was ‘Democracy Day’ on the BBC in commemoration of the 750th anniversary of the first parliament of elected representatives at Westminster — the de Montfort Parliament. I dipped in and out of programmes and the online discussion but it struck me that the debate was all really within the framework of representative democracy and our current institutions. Even the stuff about technology felt a bit constrained.
My guess is that reinventing democracy is actually a huge opportunity. The current system is so unfit for purpose and misaligned with 21st century values that when change starts to happen, it could happen pretty quickly and unleash a lot of social energy and value. ‘Democracy’ hasn’t traditionally been an area associated with startups or investment (with a few notable exceptions) but I think the scale of change we’ll see over the next decade probably warrants it becoming one. If you’ve got ideas for tech that could enable a new type of democracy, we’d certainly like to hear from you at BGV.
“The Wayback Machine is humongous, and getting humongouser”
Amazing piece in the New Yorker (they’re on fire at the moment) about the Internet Archive/Wayback Machine and the nature of ‘history’ on the web. The Archive is now based in a former Greek church in the Presidio near San Francisco’s Golden Gate Bridge full of computers that crawl and snapshot as much of the web as they can, keeping a permanent record that some would rather be forgetten.
The problem of archiving the web dates back to 1991 when Tim Berners-Lee decided on the the protocols for the web — he considered a time axis but decided against it:
“One reason it was never developed was the preference for the most up-to-date information: a bias against obsolescence. But the chief reason was the premium placed on ease of use. “We were so young then, and the Web was so young,” Berners-Lee told me. “I was trying to get it to go. Preservation was not a priority. But we’re getting older now.””
The Internet Archive is now trying to compensate for that weakness but it’s certainly not straightforward. There are plenty of examples of events that have been manipulated after the effect — some deliberately some by mistake. It’s also just interesting to search the internet with another variable. Here’s my personal blog just over ten years ago for example — as soon as you start clicking on links it takes you to a whole different web that doesn’t exist any more.
As Alexis Madrigal pointed out in a discussion on twitter about the New Yorker piece “what about apps?”. At the moment there’s nobody keeping a history of a lot of things that we use on the internet — and certainly not independently. If Facebook or any other huge company disappears — which isn’t impossible let’s face it — there may well be no archive of moments that are very precious to people. We’re just at the start of working out how to deal with that.
We had a pretty amazing turnout for the Tech for Good meetup this evening — well over 200 people. Well done to Kieron who made this one happen and thank you to Campus for hosting and Nominet Trust for sponsoring the drinks.
It was on behaviour change which seems to be a hot topic these days. We’ve seen more applications around behaviour change (particularly for health) in the past couple of cohorts of BGV than in previous rounds. I think there are huge amounts that behavioural economics and psychology can offer to the social venture world. There’s so much interesting work and evidence on types of intervention available — this UCL project was mentioning this evening that catalogues 93 Behaviour Change Techniques.
For me there’s always the question of whether people know they’re being nudged. I’m not really comfortable with these kind of tricks unless people have opted into getting some help in improving their behaviour.
Tim Harford has a neat piece in the Weekend FT about how important it is to say no.
“… every time we say “yes” to a request, we are also saying “no” to anything else we might accomplish with the time. It pays to take a moment to that about what those things might be.”
It’s much easier to say yes because nobody gets offended but also because you underestimate the future commitment that saying yes might entail. A psychological trick you can play on yourself is to ask yourself whether you would say yes to something if you had to do it immediately. I actually try to do this if I get invited to do a talk — I ask myself would I drop other things and do it tomorrow?
The thing that Tim doesn’t cover is how to say no nicely which I think is a real art. I’ve had a lot of people say no to me and some do it in a way that leaves you feeling good about the experience and others are just quite rude. Maybe how to do that is a post for another day.
I worry a lot about inequality and the positions of the main UK political parties when it comes to addressing it. Under current policies, I think it’s only going to get worse and big global trends such as technological automation of many jobs and demographic change could exacerbate it further.
One of the few ideas I’ve come across that has enough radical zeal to make it interesting is the idea of a Basic Income Guarantee. Put simply, everyone would get enough money from government to live on, independent of whether they worked or not. Everybody would get the same amount (replacing all existing benefits) and it would be funded through general taxation.
This interesting talk by investor Albert Wenger outlines why he thinks it’s a good idea. There are obviously huge issues with implementing such a scheme and I haven’t made my mind up fully, but I think it’s worth exploring. In the UK, The Green Party are the only party even considering it as an option as far as I can see.