TelarIdeas

Thoughts on trust, models and the future of markets

Stuart Gannes from RDVP pointed to "an interesting discussion taking place at the site WorldChanging.com over the pros and cons of the global distribution of artesan products. Check out http://www.worldchanging.com/ and be sure to read the comments.  The discussion surfaced a few thoughts I will share below:

1. The art of Trust.
A trusted brand is key for these kind of enterprises. There is a lot semantics involved in the home pages of the different alternative to Worldstock.com linking values, commerce and communities. Quite an art.

2. What is local?
It is very interesting how internet is redefining the boundaries of what used to be a local market. Internet is creating a global market aggregation and coordination machine connecting the local microproducers to the wealth of the first world. This is inevitable and it is understandable that the first experimenting with it are the nonprofits. Nonprofits is a popular way to bring these new models that still present high risks to forprofit minds.

3. Cross-subsidizing it!
One of the most popular business models happening in various levels is the cross-subsidizing from an overpriced product to a underpriced product, from an overpriced service to an underpriced service, from a forprofit to a parent nonprofit, from rich government to poor government, and in this case from first world market to developing world markets.

4. The inevitable present, the inevitable future.
The comments about the global shipping of products present a number of reasonable sustainability questions. It is funny that in any systemic functional analysis, the transportation functions are always the first candidates to trim and eliminate from the system to increase its value. They add the least value in the chain. As in any evolutionary process, the presence of these transport/shipping functions and so their inefficiencies in the world commercial system are inevitable for some time. But I believe they will eventually disappear in a large degree.

I foresee a future of tangibles going through the same process the paper mail is going through with the email. In my view of the future, I see art-craftman and women creating and shipping digital documents to local 3D printers of different media who would print parts, products, textiles, ceramics, etc for their local buyers. It is already happening.

Cheers,
Jose

For people For profit For many reasons...

The following is my comment to the post by Erik Sundelof 's "Is a for-profit social venture impossible?" at the Reuters Digital Vision program blog

I think there may be many reasons why we are better off being a for-profit as an alternative to a nonprofit in the pursuit of wide and deep social impact. In my building of TAVOS, I realized through the business planning of the social enterprise that there were two ways to cover the high costs of a Latin American-scale deployment: either dedicate my life and one of the others to fundraising and not work directly with the people I want to serve or look for income-generation strategies to make every community unit of the initiative sustainable. I decided for the latter. Some of my reasons were:

1. I rather devote myself to care of the people I want to serve and let the market dynamics push my organization to listen, than devoting my life to fundraising to end up detached from the end beneficiaries.

2. The communities I am trying to serve are highly entrepreneurial. 50-60% of the economy in Latin America is informal. That means that Francisco in Catia, a low-income suburban neighborhood in Caracas, wakes up every morning thinking how he will make it to bring food to the table the next day. Francisco and 100 million other Latin Americans are better served by bringing opportunities they could use to tap into their spirit than by bringing charity that will leave them highly vulnerable if the funding gets dry.

3. A for-profit will make the social impact sustainable and scalable if we are serving well the needs of the target population. If we are failing, the market will tell.

4. Embedded in my last comment, the for-profit approach forces better learnings of the market and customers than the nonprofit approach.

I do agree that there is a challenge in leading and executing with integrity a hybrid social/business-mission venture. But I think that it holds true for any enterprise today. There is also an interesting discussion about for-profits with organizational and governance structures that "lock" their social mission, for example: a parent nonprofit or member association. But that is a whole new discussion.

Cheers,
jose

Diaspora, a blessing in disguise for developing countries

I resonated with Nita Goyal's post on Brain Drain at the Digital Vision  program.    Let me convey my vision on the topic of the diaspora starting with three very close stories:

Sketch 1. Luisa left a small town to the capital to get the best education she was ready for.  Luisa discovered she was not alone.  Many other thought alike in this new environment.  They did great things together that impacted positively her country later on.  Imagine Luisa being restrained to stay in her home community college when she could aspire to go to the best schools of her country.  Now change levels: community with country, and country with the world.  Luisa is a novel prize.

Sketch 2. Maria and Paul got a 3 year-old.  They are both IT professionals that graduated from the university in a country with poor management and poor economic performance.  Maria barely found a job, Paul got a good one but needs to travel all the time out of the country for consulting engagements.  The income they make barely reaches the budget to affort a small house 3 hours from the main employment offices.  They get 6 hours of traffic everyday. In the top of that they  coordinate the care of their child with grandma in the other side of the capital.  Forget about having one of them working and the mother educating the child. Result: they leave.

Sketch 3.  Sofia is a single mother with 3 children.  Sofia left them to the grandma because the father did not committed himself.  Sofia has been in Venezuela for 20 years already. She has two daily jobs making as much money as possible as house keeper and restaurant cleaner to send money back to Colombia for the education and care of her darling family.  She gets home in the barrio at 1am in the morning and leave again at 7am. Her children finished high school.  Two of them are getting IT degrees. At her home town, there are para-military and drog mafias telling the mayor of the town and the communities how to live.

I know all these people.  They are my friends, the people I care about.  Tell me if VISAS, Taxes or anything else will stop them from migrating to get better opportunities.  Forget it!

Living this situation in Venezuela myself I have called this: the tragedy of underdeveloped countries when the media, transporation and networking hit to change the landscape forever.  Now everybody in Venezuela got access to a cable TV.  People see how others live in the world, they compare, make their numbers and things are so bad in their communities that they are willing to leave everything behind and take the risk.  I know this first hand over and over.  All my social network has desintegrated and is now around the world.   It hits me emotionally everytime a friend says "I am leaving."   People confined to their countries in the past.  More and more, it does not make sense to think of country boundaries in these scenarios anymore.  People migrate to survive and increase opportunities for themselves and their children.  There is no policy that will change that.  Taxes and visas are just another barriers for people who have already managed the worst of them.

Yes, we are loosing our middle and professional class, our talents, our brains, naturally.  They are looking for the spot where they resonate, where they thrive and have opportunities for their potential.  There is a new global reality that will continue favoring Sillicon Valleys and others.
Advances in transportation, Internet and the media hit to accelerate this brain drain. 

But in my view, the diaspora and the brain drain will become the platform for an emerging paradigm solution to the problem it created.  Stay tune and see what the diaspora in coordination with the home communities are now capable of.  Look at these two examples:  Indigo Financiera, an initiative by Margarita Quihuis pooling remittances to generate business opportunities back in Mexican communities, and FundVec, the brain child of América Soler-Everhart working form California in the USA to help neighbors build libraries in their home rural communities in Venezuela.  We can realize two perspective of this new development force emerging with these two examples.   The diaspora is closing the loop in the economic flow in which the wealth in the first world, likely earned in a global marketplace, is distributing itself back to the international communities.  People who migrated are now finding ways to give back and fulfill the needs of their home communities.

It takes more than taxes and visa.  It takes a particular heart, the sense of ownership and commitment with a community to give back.  This is the true force out there.  I believe progress created a problem and progress will solve it.  Like the bee in the flower, the Diaspora represents a blessing in disguise. 

Do you agree?  Why did you leave? Why did your friend leave?  Do they still care about their community? do you?