Multiply the population of the US by three. That’s how many people around the world live on about a dollar a day.
Do it again and now you have the number closer to $2. About forty percent of the world lives on $2 or less a day.
What’s that like? What happens to you when you have two dollars a day to live on. It’s almost impossible to imagine. I mean, $2 is the rent on your apartment for about 45 minutes. $2 buys you one bite of lunch at a local restaurant…
And yet, two billion people survive on that sort of income.
The key issue is ‘survive’. Subsistence income means that you have the barest possible cushion, that every penny is spent and you are on the edge at all times. It makes life an emergency.
If every single thing goes perfectly, then you and your family will go to sleep tonight healthy, not too hungry and fairly safe. But of course, every single thing almost never goes perfectly. If you are bitten by a malaria-carrying mosquito, you need to buy medicine and so there’s no money for food. If you need more water, you have to spend two hours walking to and from the nearest half-decent water spot, and those two hours are the two hours you were going to spend harvesting the food your kids need.
From a fundraising point of view, this endless emergency is exactly what a non-profit needs to find and close donors. A dollar donated today will save someone’s life. It will. One dollar, one life. That’s urgent. As urgent as it gets.
The problem, of course, is that it doesn’t save that person's life forever, it saves it for today. Tomorrow, there’s another emergency, and yesterday’s dollar is gone. So you need another dollar. Two billion people, two billion dollars. Every day. Today, tomorrow, the day after that. It’s an endless emergency, and it never gets better.
That’s where patient capital comes in. It starts with this belief:
The difference between being one penny behind and one penny ahead is profound.
If you’re one penny behind, then every day you fall further back. Every day, the emergencies get worse, the stress gets worse, your ability to survive (never mind thrive) gets worse.
If you’re one penny ahead, though, just a penny, then every day you build a reserve, every day you are able to invest in productivity or peace of mind, and soon you are two pennies or a dollar or five dollars a day ahead. And then you can send your daughter to college. And then you can buy something from the merchant next door. And then you can plant a better crop. And then you have a stake in the community, and then the world changes.
So, how to create this micro surplus? How to prime the pump of the system to improve productivity enough that things get better?
When two people trade, both win. No one buys a bar a soap unless the money they’re spending for the soap is worth less to them than the soap itself.
When someone in poverty buys a device that improves productivity, the device pays for itself (if it didn’t, they wouldn’t buy it.) So a drip irrigation system, for example, may pay off by creating two or three harvests a year instead of one.
What does that do for the family that buys it? Well, if you have one harvest a year and you’re living at subsistence, it means your income is zero, or probably just a little below. If you can irrigate and get two or three harvests a year, though, your income goes up by infinity. Now, instead of making -1 pennies a day, you’re making 100 or 200 pennies a day. That’s a surplus of $700 a year. That’s enough to participate in other productivity or life-enhancing investments, like a well, or a roof, or health care. Now, the edge is a lot further away.
And what does that do for the family that sells it? When markets arrive, productivity increases and new innovations can be diffused more quickly, because change is brought in by the market.
How does Acumen Fund create these markets? The answer is patient capital. The companies that are selling solar lamps to replace kerosene or water purification systems in tiny villages, or housing projects for peasants in Pakistan or even ambulance services in Mumbai fully intend to make a profit, but the venture capitalists on Sand Hill Road aren’t in a hurry to invest in them. The investments are a little too risky, take a little too long or a little too unproven to take a chance on.
So Acumen finds these entrepreneurs on site in the developing world, funds them, teaches them and pushes them to build really big organizations. A to Z has literally thousands of people in their modern factory creating malaria bed nets in Tanzania. And so it grows.
I’m thrilled at the work Acumen has done, and excited about where the fund is going. I’ve got some interesting fundraising ideas to share with you this fall, and I thought it was worth taking you through my reasoning as to why I chose this organization as the recipient.
Any entrepreneur or marketer can learn a lesson from how new systems create new markets, and how an infinite increase in income or productivity can change everything. Everything.
I think this is a big idea, but your mileage may vary.
I've been having great success with a hybrid of the yellow legal pad and a printed presentation from Keynote (or Powerpoint). I use it during small meetings where more interactivity is useful, and where the group is too small for a laptop to be the best way to present slides (I think running a presentation says, "I talk, you listen…")
Here's how it works:
Create a presentation. A good one, not one filled with bullet points. Instead, graphs, images, a few words to anchor a discussion. A page might be nothing but a blank 3 x 3 grid.
On every page, remove some of the information.
Print the presentation out (horizontal, not portrait).
Bring it to Staples and have them spiral bind it with covers. (Not that cheap plastic comb, though.)
Get a good pen.
Now, when you make your presentation, sit next to the person you're meeting with and go through the booklet page by page, writing directly on each page. As you work your way through the ideas in the booklet, the two of you can talk about what's in front of you and mark it up.
It's not a brochure, it's the outcome of a working session. Leave it behind when you go.
Zig Ziglar taught me about the most powerful way to use a yellow legal pad. He calls it a "talking pad."
When you're in a small meeting (you and one or two other people) it's awkward to use a laptop or Powerpoint, because it destroys the intimacy of the discussion. Basically, it says, "I'm going to talk to the screen and you can watch, okay?"
The alternative is to use a thick pen or marker and a legal pad.
Whenever you mention a number or make an assertion or promise, write it down. The act of writing is a verb, it's the process of putting it on the page that underlines what you've said, that highlights the moment. You're also creating a record of what you said, which emphasizes that you're not a weasel.
Salespeople can use this technique as well. Let's say you're trying to sell energy-efficient windows. They cost $800 each, the person needs 30, so you're trying to make a $24,000 sale. That's a big deal, right?
Start by writing these facts down.
Then, working with the person you're sitting with, identify how much is going to be saved every day. Not your opinion, but their estimate based on their energy bill and comparable homes. Agree on a number. Write it down.
Cut it in half. Now it's truly a realistic, conservative estimate. Write it down.
Multiply it by the number of windows. Write it down. People hate math.
Now, pull out your calculator and figure out the cost of the monthly financing. Oh! The cost is way lower than the amount saved. The windows are free.
The talking pad makes the sale. It builds credibility and helps you run the meeting.
The long tale is the never-ending story you tell your prospects, your customers and your employees.
The hard part is getting a little bit of permission to start telling your tale. The overlooked part, the part that wastes all that permission, is that you forget to keep telling your story.
Are you really the same as you were a year ago? How often do you re-introduce yourself? What's truly new (as opposed to what does the salesforce think is new)? What's the next chapter that matters? Almost all the goodness of marketing comes not from the big announcement, but from the long tale.
When the outside world changes, do you? Does the regulatory or environmental or competitive marketplace have an impact on you or us? That's part of the tale. Share it.
Actually, there isn't one, there are three choices that anyone offering higher education is going to have to make.
Should this be scarce or abundant?
MIT and Stanford are starting to make classes available for free online. The marginal cost of this is pretty close to zero, so it's easy for them to share. Abundant education is easy to access and offers motivated individuals a chance to learn.
Scarcity comes from things like accreditation, admissions policies or small classrooms.
Should this be free or expensive?
Wikipedia offers the world's fact base to everyone, for free. So it spreads.
On the other hand, some bar review courses are so expensive the websites don't even have the guts to list the price.
The newly easy access to the education marketplace (you used to need a big campus and a spot in the guidance office) means that both the free and expensive options are going to be experimented with, because the number of people in the education business is going to explode (then implode).
If you think the fallout in the newspaper business was dramatic, wait until you see what happens to education.
Should this be about school or about learning?
School was the big thing for a long time. School is tests and credits and notetaking and meeting standards. Learning, on the other hand, is 'getting it'. It's the conceptual breakthrough that permits the student to understand it then move on to something else. Learning doesn't care about workbooks or long checklists.
For a while, smart people thought that school was organized to encourage learning. For a long time, though, people in the know have realized that they are fundamentally different activities.
Imagine a school that's built around free, abundant learning. And compare it to one that's focused on scarce, expensive schooling. Or dream up your own combination. My recent MBA program, for example, was scarce (only 9 people got to do it) and it was free and focused on learning.
Just because something is free doesn't meant there isn't money to be made. Someone could charge, for example, for custom curricula, or focused tutoring, or for a certified (scarce) degree. When a million people are taking your course, you only need 1% to pay you to be happy indeed.
Eight combinations of the three choices are available and my guess is that all eight will be tried. If I were going to wager, I'd say that the free, abundant learning combination is the one that's going to change the world.
Here's a surefire way to get and keep the attention of your audience: put on a soap opera.
If there's always a feud, a criminal investigation, secret photos, innuendo, allegations of drug use, partnerships foundering, acquisitions started, delayed or canceled, secret new projects, and possible runs for office, you can bet people will tune in.
I apologize for the lack of drama on this blog (not really).
Michael Jackson, Fidel Castro and Sarah Palin created drama. Paying attention, though, is the not the same as buying or respecting. It's possible to achieve both, but not easy.
Challenging the status quo is what I do for a living. Either that or encourage other people to do it.
But there are two ways to do it, and one of them is ineffective, short-sighted and threatens the fabric of the tribe. The other seems to work.
I heard someone screaming about death panels and how the government was not only going to kill his grandmother, but would take out Stephen Hawking himself if it had the chance.
The screaming is a key part, because screaming is often a tool used to balance out the lazy ignorance of someone parroting opposition to an idea that they don't understand. (If you want to write to me about this post, please write to me about the screaming part, not about whether or not you agree with the facts or the science. That's what the post is about, the screaming.)
If you want to challenge the conventional wisdom of health care reform, please do! It'll make the final outcome better. But if you choose to do that, it's essential that you know more about it than everyone else, not less. Certainly not zero. Be skeptical, but be informed (about everything important, not just this issue, of course). Screaming ignorance gets attention, but it distracts us from the work at hand.
It's easy to fit in by yelling out, and far more difficult to actually read and consider the facts. Anytime you hear, "I don't have the time to understand this issue, I'm too busy being upset," you know that something is wrong.
Brands face this as much or more than politicians do. I witnessed a knock-down fight between two teenagers over which operating system was best. There are generations of arguments between Ford and Chevy owners. Motorcycle gangs are often parochial in their choice of bike. And in each case, the less people know, the more they yell.
If you want to change what your boss believes, or the strategy your company is following, the first step is to figure out how to be the best informed person in the room.
I think internships are overrated. Most of the time, the employer thinks he's doing the intern a favor, but he doesn't trust the interns to do any actual thoughtful, intelligent work worth talking about. And to be fair, most of the time the interns are busy hiding, not grabbing responsibility but instead acting like they're in school, avoiding hard work and trying to get an A.
Charlie Hoehn has written a beautifully designed ebook that may change the way you think about this. His argument is that 'free work' is something else entirely. It's done as a freelancer, remotely, without direct supervision and it creates a measurable output.
Free work isn't easy to get. Big companies, for example, have bureaucrats that don't often know what to do with a great offer like this. And some people (I'll put myself in this category) are too hands-on to take advantage of it. But you'd be amazed at how many fast-moving companies or influential individuals are all too happy to share credit if it helps the work get done.
And the benefit to the underemployed? You guessed it: great experience and a resume builder that actually means something. Isn't it odd that we're willing to spend $300,000 to buy an accredited but ultimately useless academic line on our resume, but we hesitate to do a month of hard work to create a chunk of experience that's priceless?
For a new project, I'm collecting photos of people who make a big difference in your working life.
If you have a photo you can share (see fine print below) of someone you work with, buy from, sell to or interact with professionally–someone who matters, who contributes, who makes a difference–I'd love to include it. It might be your boss, a copyeditor, a waiter, a craftsperson or even (!) a consultant.
All you have to do is attach the photo to an email sent to this address. I won't be able to respond or to read any notes attached, sorry. (Here it is if you have gmail: firstname.lastname@example.org.)
Fine print: please don't send pictures of dogs, cats or iguanas. No family members, either, we know you can't live without them. No guarantee of inclusion. Close cover before striking. By sending the photo, you acknowledge that you have the right to share it and you're giving me permission to use it. Thanks.
Deadline: Midnight, September 1, 2009. Don't be late.
August 13, 2009
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