BIF-4 – Last Session

Joshua Klein, Senior Technology Principal, Frog Design

Joshua told us all about How to Publish Your Own Book:

1) Write book, 2) Give it away, 3) Give it away everywhere, 4) Look Around, 5) Collaborate, 6) Commiserate.

Joshua used a commons license instead of copyright. He gave it away, and almost no one read it. Then he made it a book for the iPhone, the second ever, and he got 12,000+ downloads. Book deals are hard to get, and self-publishing is hard, but publishing on demand was a nice option. Then he collaborated with an artist to get a cover; artist got free distribution, he got a free cover. It’s very inexpensive to create content and to publish them in various formats on a variety of different platforms. At the root of it, always, is the people. (It’s the about the audience).

*Bruce Nussbaum, Contributing Editor at Businessweek, moderated the discussion for this conversation:

Jeffrey Hollender*, President and Chief Inspired Protagonist, Seventh Generation

Jeffrey suggested a different paradigm for companies: instead of being “less bad”, companies should be harmonious or healing as an aspiration. Incremental improvement isn’t bad, but it’s not enough. It’s important to aspire to more though, and as a company, even invest in that ideal even when you have no idea how you’re going to do it.

They talked about the crisis. Even in this economy, we can’t afford to lose the ground we’ve gained on sustainability.

Jeffrey talked about doing business with Wal-Mart, which still is terrible in a lot of ways, but Wal-Mart stuck to their commitment to sustainability, and they are moving in the right direction. He cited basically the Wal-Mart effect in forcing manufacturers to be more efficient.

He made an interesting point about creating more consciousness, because it’s not something we do enough. Only by making constantly conscious decisions can we recognize the patterns and then create new ones.

He talked about creating a culture of openness at work where anyone can walk in his doors and ask him any question. There are some brave souls, but in many ways, people have been damaged by their past work experiences when they said something and they were let go or not promoted.

They talked about transparency. If they had been honest a particular problem about a particular product from the beginning, when the news broke on the story, it wouldn’t have been news. They believe radical transparency is necessary to create trust. Business is so scared to talk about what they are doing wrong. You have to demand it throughout the sales channel, and we need to demand it as consumers. If ever there is a time for self-reflection and asking if there is anymore you can do, this is it.

Cat Laine, Deputy Director, Appropriate Infrastructure Development Group

Cat talked about the disconnect between the existence of helpful products and the lack of manufacturing and distribution for those products in the poor countries that need them. For example, corn shuckers that cost $2 in Africa but aren’t available to women in Guatemala who spend hours picking corn because they aren’t made in Guatemala. The solution is not just innovation, but local innovation.

She gave examples like a hydro-electric phone charger that were created in local communities using local goods that solved local problems.  And those innovations can be useful in the developed world as well.  For example, wind belt technology was developed to meet local energy needs in a developing country, but the technology is now being used for power generation for ventilation sensors.  In other words, techonologies developed elsewhere in the developing world could be integrated into products back in the US.

Finally, Cat said that by developing local solutions and investing in mid-sized projects (just beyond mirco-fianncing), we can help others be the ones to solve their own issues.

Terry Pierce, Director, United States Air Force Academy Center of Innovation

Terry talked about the incredible ideas coming out of the military, but showed us the downside of developing for the military: a technology is generally developed for one application and the military isn’t good about thinking broadly about how to apply that technology.  The air force, like DARPA, is working on some really out-there ideas, like how to dissipate a hurricane, etc.  Also like DARPA, if 1 in 10 projects pan out, it’s a success; if 2 or 10 pan out, it’s a failure because it hasn’t stretched far enough.  Terry came back to one of the meta-themes of the conference: making failure an acceptable outcome allows innovation to reach further.

Fran Johansson, Author, The Medici Effect

Fran asked, “Why hasn’t the crisis come up today? “  His answer was that we will always need innovators.  When you’re an innovator and the market changes, there is still a need for new solutions.

What Fran talked about next summarizes we VCs always invest in the team (but they can’t tell you why):

Innovators view risk differently.  We adjust our behavior based on the risks around us, he called it the “risk homeostasis” (otherwise known as moral hazard).  In other words, the more risk mitigation you give an entrepreneur, that entrepreneur will adjust his or her behavior to an increased level of risk.  If that’s true, then the success of an idea is not based on the amount of money or the experts the venture has available because startups will increase their risk if they have more of those resources.

How do we could overcome this effect?  Well, if we could figure out a monopoly, we’d just do it, but they often happen by accident.  The other explanation is that chance and serendipity rule a lot of outcomes (in life partners, careers, etc.)  At the very least, they play a much larger role than we give them credit.  But we shouldn’t be depressed by that, because we can take more chances (experiment).  This is the constant iteration process that startups need to get to something that works.  But to keep on experimenting and iterating, we need to be highly motivated.

Perserverance and grit – how do we get it? We can either put ourselves in a war situation (i.e. my house is on the line), or we have passion. Passion helps us take chances and iterate until we find the success.  The conclusion: Passion is the most critical component to success.