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Sally Osberg at the Commonwealth Club, July 2010: Social Entrepreneurship and the Art of Motorcycle Maintenance

July 27, 2010 by
 
 
 
 
 

Remarks by Sally Osberg delivered July 27, 2010 at the Commonwealth Club for their Social Entrepreneurship in America series.

Thank you, Ruth, for that kind introduction… and for your leadership in creating this landmark Commonwealth Club series on social entrepreneurship. It’s an honor for me to be one of the speakers you’ve brought together—among the 13 of the folks you’ve assembled are several Skoll social entrepreneurs and partners the Skoll Foundation’s been privileged to support: people like Muhammad Yunus and Mary Houghton, Bill Drayton and Jacqueline Novogratz, Premal Shaw and Willy Foote… extraordinary human beings and exemplary social entrepreneurs.

Most of you are here because you’re interested in this genus we know as the social entrepreneur… but before we go there, I’d like to take you down a side track. Not just any sidetrack, let me add, but a flat track—the kind preferred by serious motorcycle racers, people like Barry and Andrea Coleman. Just last week, these two iconic bikers, who also happen to be the iconic social entrepreneur founders of Riders for Health, visited with us in our offices in Palo Alto—where they explained just what flat track racing had to do with social entrepreneurship.

I suspect that like me, few of you had ever heard of flat track racing, which is to serious bikers the most primal, authentic and thrilling form of competition, harkening back to the origins of the sport at the turn of the century. The track itself is dirt, its compass that classic oval shape, and the motorcycles make 20 or so laps around during the course of a race.  As they roar around the track, the bikes gradually wear a groove where you’d expect to find it—near the center and hugging the inside; along the outside, the kicked up dirt and dust forms what’s known as the cushion, a far riskier place to ride, for obvious reasons: the dirt is soft, traction uncertain.

Social entrepreneurs, Barry explained to us, ride in that cushion: no grooves, plenty of potential to slip and slide out of control, plenty of guts and determination required.

Now just in case you might be thinking social entrepreneurs like the Colemans are daredevils, let me assure you that they’re as disciplined as they are determined.  Taking to the cushion requires confidence: in your experience, your skill, and the condition of your motorcycle, which must be impeccably maintained: oil, gas, gears, engine, down to knowing the depth of your tire treads to the millimeter.

If there’s anything I want you to take away from this talk, it’s that social entrepreneurs are entrepreneurs: every bit as focused, disciplined, creative, courageous and hard-driving as Bill Gates or Steve Jobs. Even more so.

To underscore the point, think about that famous dancing duo Fred Astair and Ginger Rogers. I know, I know—what’s she doing now? First motorcycling and now ball room dancing??

Stay with me here. To me, the social entrepreneur is to the entrepreneur what Ginger Rogers is to Fred Astair…because social entrepreneurs have to do everything that entrepreneurs do, but backwards and in high heels.

Social entrepreneurs see and seize opportunities just as entrepreneurs do, but they must plan each step forward without financial systems or venture capitalists to back them. Social entrepreneurs, like all successful entrepreneurs, combine a predisposition to action with rigorous business planning.  Even though they can’t aim at anything as definitive as a liquidation event, they must convincingly articulate where they’re headed and the social impact they’ll achieve.  Most also will carry out their strategies by building ventures—which require boards to govern, cash to pay the bills, and organizations of talented, highly motivated folks to do the heavy lifting.

In what follows, I’m going to share with you how the Skoll Foundation came to focus on social entrepreneurs, what we’ve done over our first decade of work to help them scale their impact, a bit about what we’ve learned along the way and where we’re headed.

10 years ago, I’d never heard the term social entrepreneur and neither had Jeff Skoll. But in late 2000, when Jeff invited me to serve as his foundation’s first CEO, he knew that he wanted us to seek out and back a certain kind of leader, people with entrepreneurial solutions to social and environmental issues. As I met and got to know Jeff Skoll, what I saw was someone of that same stripe, an entrepreneur prepared to bring his creativity, his business discipline, his razor-sharp mind and driving determination to address societal challenges with his philanthropy.

A serial entrepreneur–in fact, Jeff had already started two companies by the time he joined Pierre Omidyar as eBay’s first president—Jeff’s first real foray into philanthropy was his creation of the eBay Foundation, which he did in a decidedly entrepreneurial way: dedicating pre-IPO shares of eBay stock to seed an endowment that soared to more than $35 million when the company went public in 1997. Jeff then ran the eBay Foundation, so by the time he launched the Skoll Foundation two years later, he’d developed a real bias for folks with exciting visions, proven track records, and credible plans for making big dents on big issues.

Shortly after joining Jeff, I arranged for us to meet together with one my mentors, John Gardner. John was advisor to five U.S. presidents, architect of Lyndon Johnson’s Great Society, founder of Common Cause, and fairly early in his career, head of a foundation, the Carnegie Corporation where, among other accomplishments, he commissioned the report that led to creation of the Public Broadcasting Service.

I could think of no one wiser to counsel us—so I held my breath as Jeff asked John just how to go about making as much of a difference with his foundation as possible. John’s answer was deceptively simple: Bet on good people doing good things, he told us.  It’s advice that affirmed we were on the right track—our first mission, actually,  was to “invest in those with the greatest potential to make lasting positive contributions to their communities and the world” even as we clearly had work to do in getting clear about just who those “good people” were and how to evaluate the “good” they proposed to do.

Once we learned there was a neater description for the kind of good people we were attracted to and already supporting—people and organizations like Bill Strickland and his Manchester Craftsman’s Guild, or Martin Fisher and Nick Moon and Approtech (now Kick Start)– that they were known as social entrepreneurs,  and that organizations like Ashoka had been at it for some time, we knew the responsible thing to do was to look at what was needed and how we could contribute.

That led us to undertake a process of market analysis with a top flight our good friend Noah Manduke—who recently, by the way joined the family as Chief Strategy Officer for the Jeff Skoll Group.

What we found was that Ashoka was focused on early stage social entrepreneurs, Echoing Green on emerging social entrepreneurs, Acumen Fund on potentially profitable social enterprises, but no one was homing in on social entrepreneurs at a mezzanine stage, when, arguably, leverage could be greatest.  We also discovered that social entrepreneurship was very much a niche in the larger space of societal change-making, and not really yet on the policy, media, or philanthropic radar.

Putting this all together, we saw a great opportunity–to go deep, by seeking out and backing the highest potential social entrepreneurs we could find, and to go broad, by building the field of social entrepreneurship.  Thinking more like a social entrepreneur—which was no accident given our founder’s DNA—we crafted the strategy that, with tweaks and upgrades, continues to serve us today—to help bring about change where change is most needed by investing in, connecting and celebrating social entrepreneurs dedicated to solving the world’s most pressing problems.

I know you’re expecting me to define a social entrepreneur, and I’m not going to disappoint you. I actually hope to convince you that social entrepreneurs play a distinctive role in driving societal progress, that they are to social change what business entrepreneurs are to economic progress.

Both the concept and practice of entrepreneurship has been around for hundreds of years, way before those paradigmatic Silicon Valley entrepreneurs came on to the scene. As early as the 16th Century, the term was used to describe someone who undertakes a business venture, and by the 18th century, an Irishman thought to be the first economic theorist, Richard Cantillon,  characterized entrepreneurs as those who bear the risk of bringing an idea or an innovation to the marketplace.

Social entrepreneurs, like entrepreneurs, are game changers. Joseph Schumpeter’s famous paradox defines entrepreneurs as forces of creative destruction; we define them as pioneers of innovations whose purpose is to benefit humanity. They’re out to change the status quo—what Roger Martin, Dean of the Rotman School of Business at the University of Toronto, and I have characterized as unjust societal equilibria  that sustain human suffering, marginalization, and oppression—that hold people back from realizing decent lives and their potential.

Social entrepreneurs see opportunities where others see intractable problems. Fueled by the power of their visions, they assume the risk of building ventures, generally in the form of organizations, to drive their innovations forward.

In both their ways of working and their zeal to effect equilibrium change, social entrepreneurs are different from social service providers and social activists—although some get started as providers or activists, and many integrate advocacy strategies in targeting specific policy reforms.

I suspect most of the people in this room are worried about one or more problems out there; some proportion of us may even have ideas about how to address them. But it’s the rare human being who actually translates that idea to an innovation and builds the mechanism or venture to carry it forward.

The social entrepreneur’s journey nearly always begins with an insight or inspiration—a challenge worth tackling, sometimes accompanied by a personal tipping point, that existential moment when she puts to herself the big question: “If not me, who? If not now, when?”—and then tasks herself with the business of designing the innovation and venture—often in the face of skepticism—and summons inexhaustible funds of fortitude to drive into the headwinds.

The social entrepreneurs we invest in at the Skoll Foundation are of this special breed…and they’re well on their way, having proven their models and arrived at an inflection point where they’re poised to scale their solutions in a significant way.  We select them, we provide core support to them in the form of an initial multi-year grant, and we connect them to their peers, media partners, funders and others.

To build the field of social entrepreneurship, though, we had to go beyond grant-making and partnering with existing organizations. If we were to make the kind of impact on the enabling environment for social entrepreneurs we hoped to make, there was nothing else to do but roll up our sleeves and build some new ventures ourselves. Today, those ventures that have played a significant role in bringing social entrepreneurship from the margins and into the mainstream include the Skoll Centre for Social Entrepreneurship now headed by my colleague Pamela Hartigan at Oxford University’s Said Business School, SocialEdge, our on-line community for social entrepreurs; the Skoll World Forum, dubbed by its third year the “Davos of social entrepreneurship,” and a suite of media products and partnerships with entities like Sundance, PBS’s Newshour, and the BBC that have resulted in 79 broadcast stories, 181 news reports for radio and podcast, and 12 feature length documentary film projects.

That this body of work has helped spawn more than 200 university and college programs around the world dedicated to social entrepreneurship, a steady increase in interest, references and actions among influencers in the media and policy realms–including the Obama administration’s new Office of Social Innovation and—and dramatic increases in awareness and funding from finance and philanthropic players, has made us proud, even as we acknowledge how much more there is to be done and tip our hats to other great players carrying this agenda forward.

As for our direct engagement with social entrepreneurs, we’ve been on a remarkable journey over our first decade, learning a whole lot about their strengths and flaws, the design and stages of their ventures, and the habits of mind and strategies that are likely, over time, to make them successful. Along the way, we’ve kept faith with Jeff’s vision to help bring about a more peaceful, prosperous and sustainable world and our mandate to go beyond grant making in our work with social entrepreneurs, to connect them with opportunities and resources,  and to celebrate who they are and the difference they make.

To illustrate how our strategy has played out, let’s go back to those two motorcyclists Andrea and Barry Coleman.

Their story begins in Donington Park, home of Britain’s motorcycle Grand Prix. For reasons that Barry Coleman, whose academic degree is in philosophy and whose first career was as a journalist for, among others, the Guardian, Forbes, and the BBC, continues to puzzle over, the sport’s racers initiated fundraising to support children in developing world countries—and cared enough about the difference their efforts were making to travel themselves to Africa. What they experienced shocked them: they heard from nurses unable to deliver healthcare to villages within 20 kilometers of a clinic, they saw women hemorrhaging from childbirth transported in wheelbarrows, and they counted by the hundreds rusted vehicles abandoned on roadsides and motorcycles piled up at clinics for want of a $3 part.

For people who knew about engines, none of this made any sense; for people who were raising funds to benefit suffering children, it was-in a word-insufferable. For several years in the 80s and early 90s, Barry worked with agencies like Save the Children to develop systems to manage and maintain vehicles in harsh environments, testing and proving the model in partnership with Africans in Uganda, Lesotho and Zimbabwe, while Andrea focused on expanding global support in the motorcycling community for Africa’s children.

Over the ten years between 1986 and 1996, they demonstrated the brilliance of Barry’s Transport Resource Management approach, increasing the efficiency of African health workers by more than 300 percent, dramatically reducing  infectious disease incidence and mortality rates, and significantly strengthening African health ministry capacity and accountability.

By the mid-90s, they were ready for independence, craving the autonomy and focus that is the entrepreneur’s differentiator. Back to backwards and in high heels, though: Barry and Andrea were successful, well-educated people, but by no means wealthy themselves.  To capitalize the venture and secure its autonomy, they couldn’t reach into their own pockets,  tap a circle of rich friends, or get a bank loan—so, they mortgaged their house—and in 1996, Riders for Health became a registered charitable organization in the U.K.

In 2005, the Skoll Foundation undertook due diligence on Riders, assessing it against our criteria: evaluating its entrepreneur founders, the significance of the issue it was addressing, its track record, its inflection point—whether it was poised to scale its impact significantly—and its readiness for what we had to offer. They came through with flying colors, and in 2006, we brought the Colemans and Riders into our portfolio, honoring them with the Skoll Award for Social Entrepreneurship in early 2006 and granting them $765,000 over 3 years for core support.

So far, so good—but not really all that different from what any progressive grant maker might do. The story gets more interesting as we get to know Barry and Andrea, and they get to know us.

In 2008, they approached us with a plan to expand their work in the Gambia—by transforming their model. Instead of managing an effective but modestly scaled NGO program in the Gambia, they were prepared to contract directly with the Gambian ministry of health to meet 100 percent of its transportation service need—but to do so, they would have to amass the capital necessary to purchase outright their fleet of vehicles. We could have made a grant, of course—but Barry and Andrea were advancing a business model and sought financing. We could have made a program related investment directly with Riders.  A program related investment or PRI is a tool available to a private foundation. It’s not a grant but a market-based investment, usually debt or equity, made in support of the foundation’s charitable purpose; when made, it counts against payout, and when recovered, it must be credited against payout in that period. But that would have missed another opportunity, to strengthen the Gambia’s institutional lending capacity. What we did was deposit $2.2 million in a Gambian bank in Bangul to serve as a guarantee—thereby securing the deal: Guarantee Trust Bank Gambia then lent Riders the money and the health ministry contracted with Riders, thereby providing the revenue needed for the organization both to deliver its service and repay its debt.  But the real excitement here is that this deal is securing health care for the entire Gambian population—more than 2 million people, proving that “last mile health delivery” can be achieved consistently and sustainably over time.

Last year, when we were approached by an organization to develop a series for distribution on the BBC, we naturally wanted to include Riders. The series, produced by Rockhopper TV and titled Alvin’s Guide to Good Business aired just this past April. Because Andrea and Barry are as strategic as they are telegenic, they seized upon the opportunity to use their star turn on the BBC with the Zambian ministry of health, with which they were in the earliest stages of negotiating.  Fast forward to outcome: after screening the episode with ministry officials, they inked a memorandum of understanding in an unprecedented 9 days—the customary and usual negotiation with a new African country taking upwards of two years.

And we’re still not done. At the Skoll World Forum this past April, senior representatives of OPIC, the Overseas Private Investment Corporation,  were in the delegate audience for a session during which Andrea spoke; hearing about Riders and its model, OPIC officials  went straight up to her following the session and said,  “We want to fund you.”

Another story that’s fun to tell, and which shows just how fraught with risk the social entrepreneur’s path can be, is about Kiva—which is a big success today but almost didn’t make it through Year One. The organization’s bank account was heading toward empty in the fall of 2006 when Frontline World, with Skoll Foundation support to suss out and report about social entrepreneurs, did a story. The night it aired—on Halloween, actually—the organization’s servers crashed due to traffic overload. 3 days later, when Kiva got back up, it was able to process more than $250,000 in new loans. Without that right intervention at the right moment, Kiva might not have made it—and certainly wouldn’t have surpassed the $100 million mark as it did earlier this year.

I tell you these stories not as an exercise in self-promotion–as a friend loved to quip, “ self-congratulation can be habit-forming, and most organizations are long gone in addiction”—but to bring our “invest, connect and celebrate” mission  to life. And to shine a light on the overriding imperative, for the Colemans as for the Skoll Foundation, of impact.

You might be noticing about now that I haven’t once referenced that “going to scale” shibboleth so common in this sector.  For us, as for most of the organizations we work closely with and for thought leaders in this field—people like Greg Dees of Duke’s Center for the Advancement of Social Entrepreneurship—the only scale that matters is that of impact.

Elsewhere I have argued that our concern with scale should not focus on an organization’s size or budget, but the scale of its impact: its ability to transform systems, right injustices, and demonstrate that it can solve seemingly intractable problems. This isn’t to say that social entrepreneurs shouldn’t grow their organizations, but only to restate my thesis: that how big you are is in no way a measure of how good you are at driving change.

Inevitably, though, questions of scale force us to consider numbers—what to count and what that information tells us. At the risk of voicing yet another earnest caution about the role of metrics, let me admit straight out that numbers only get us so far on the proof-of-impact imperative.

Think, for example, of one of the most famous acts of philanthropy ever: Andrew Carnegie’s initiative to build public libraries, carried out between 1886 and 1919 through a “matching” grant program. More than 2,500 libraries were built as a result of this effort, the first in Scotland, most in the United States, but also across England, Canada, New Zealand, and even Fiji. Now, library buildings are easy to count, as are the books that fill them; circulation data—how many people are checking out how many books—tells us a bit more, giving us information about how many people are using libraries and what they’re reading. What’s much harder to measure is the arguably more important impact of those libraries on communities—whether their citizens are better educated and more informed due to the libraries. Common sense tells us they are. Common sense also tells us that Carnegie’s philanthropic intent was not simply to dot the landscape with libraries, but to ensure the people he believed to be a society’s “most industrious and ambitious” and “most capable of helping themselves” were afforded the means to improve their lives and their communities. Doing the work we do—whether as social investors or as social entrepreneurs—requires both accountability systems and what I’d call, unapologetically, common sense leaps of faith.

For great philanthropists like Andrew Carnegie and Jeff Skoll, as for the great social entrepreneurs in the Skoll Foundation portfolio, empowering those with the greatest stake in benefiting themselves, their societies and the larger world is fundamental to achieving large scale impact. It may seem an obvious point, but it’s not trivial.  Enlisting, engaging, enrolling and fully empowering individuals and communities written off by markets, ignored or marginalized by governments, and patronized as beneficiaries by NGOs is the very oxygen social entrepreneurs breathe.

Beyond this fundamental way of working in partnership with those they serve, social entrepreneurs, we’ve found, are more likely to be successful in driving large scale impact when they can clearly articulate an innovative solution to a pressing problem; when they punch above their weight by engaging strategic partners to scale their impact; when they align their revenue generation models with their missions; and when they build sound, sustainable organizations.

Within the Skoll Foundation’s portfolio, Amitabha Sadangi provides a great example. International Development Enterprises (India) (IDEI) helps turn subsistence farmers into income-generating producers via base of the pyramid market products. Over the organization’s 20 year history, its treadle pumps and customizable KB drip irrigation units have generated more than $1 billion in wealth, leading in turn to significant increases in health, education, and dignity for rural farm families.

Beyond these direct impacts, Amitabha’s work has also helped counter two interrelated and increasingly threatening trends—groundwater depletion and climate change. IDEI’s products are 50 to 70 percent more efficient in their use of water than their competitors’ offerings, while simultaneously boosting crop yields by an impressive 50 percent. In addition, because IDEI’s hand-powered pumps have displaced gas-driven pumps, they reduce carbon emissions. Typical of a social entrepreneur, Amitabha has seized on this measurable benefit to obtain carbon credits under the European Union cap-and-trade system, bringing in additional revenues to support his work. IDEI is doing for poor rural producers what Grameen did for poor borrowers, literally design-building the field of micro-irrigation. The Gates Foundation’s recent decision to invest $27 million in IDEI to bring its model to Africa is just one more sign of the organization’s growing impact.

Mitch Besser and Gene Falk have led mothers2mothers, which works to halt pediatric AIDS transmission, on a growth of impact trajectory that has the organization now reaching one in five pregnant women with HIV worldwide. A 20 percent global market share of a target audience is a phenomenal achievement for any company, the more impressive in this case for being a market of expectant HIV positive mothers who, when given the opportunity to be educated by their M2M-trained peers, can protect their babies from AIDS.

Soraya Salti of INJAZ al-Arab now reaches hundreds of thousands of students across the Middle East with life-skills and entrepreneurship training because she’s been able to get entire public school systems to embrace her program. Ann Cotton’s Camfed, the Campaign for Female Education in Africa, has developed a community-based model so powerful that the hugely influential Linklaters international law firm is documenting its principles and strategies in order to influence how aid is deployed in the developing world.

You get the picture: Amitabha, Gene and Mitch, Soraya and Ann are well on their way to achieving big impact—and in that process, they’ve taught us what it takes: legions of empowered stakeholders, well-designed and effectively deployed models, evidence-based systems that track results, aligned resource engines, strategic partnerships that scale and leverage their impact, and organizations built to last.

By now, you’re probably thinking we’ve got this work nailed, that all we have to do is let those social entrepreneurs get to it.  But  let me assure you—it’s early innings, the game far from over,  definitive victory on any major front—the kind declared and justly celebrated in the 20th century for defeating scourges like smallpox and  the Nazi regime –uncertain.

Heading toward our tenth anniversary at the Skoll Foundation, with Jeff’s and our board’s encouragement, we held up the mirror and asked ourselves whether we were doing enough, doing it well enough, or whether—in fact—social entrepreneurship was up to the formidable challenges confronting humanity and the planet. Just looking around, big problems like climate change or extremism seemed to be getting worse, more complex, their implications far more frightening.

But as a good friend of ours, Paul Hawken, has said, “When asked if I am pessimistic or optimistic about the future, my answer is always the same: If you look at the science about what is happening on earth and aren’t pessimistic, you don’t understand the data. But if you meet the people who are working to restore this earth and the lives of the poor, and you aren’t optimistic, you haven’t got a pulse.”

At the Skoll Foundation, we felt for that pulse and it came up strong: optimistic, no question about it… but not the flaccid, wide-eyed kind, rather, the sinewy, steely eyed kind, what the Arctic explorer Ernest Shackleton meant when he defined optimism as courage.   Preparing to go the distance with social entrepreneurs tackling the big issues of our time—poverty, food security, human rights, health, climate change—requires more than the easy bit of reaffirming our commitment to social entrepreneurs; we must, we recognized, raise our game.

So instead of seeing social entrepreneurs and their organizations as the be and end-all of change-making, we’ve taken to heart three of the lessons they’ve taught us—first, that strategic partners in business, civil society, and government are not nice to haves, but absolutely key to change-making; second, that while vested interests will always resist the forces of disruption, every ecosystem is also fizzing with allies ready to help, but they need connecting and celebrating, too;  and finally, that to be a serious partner, we need to get off the sidelines and into the fray. In the near term, we’ve set ourselves the goals of getting a lot smarter about a set of priority issues, better networked with players in those issues, and clear about what we can do to help influence the changes in behavior, policy and systems needed.

Some of our partners are already in the Skoll family—our colleagues at the Skoll Global Threats Fund, at Participant Media and Take Part, at Capricorn Investment Group, and on the Jeff Skoll Group team—the remarkable community of organizations Jeff has created to help bring about a better world; several of my beloved brothers and sisters from the Foundation and the immediate family are here tonight—and believe me, we’re already seizing opportunities to unleash our collective impact…making darned sure Skoll social entrepreneurs focused on public education know about Participant’s upcoming documentary on the subject, Waiting for Superman; tapping the Global Threats team’s knowledge networks as we build out next year’s program for the Skoll World Forum; referring social entrepreneurs with game-changing business ventures to Capricorn—and much more.  Many other partners are in the room tonight and listening in on the radio—thanks for being here,  for tuning in, for doing what you do to make a difference.

I don’t think John Gardner knew the Colemans, but he might have had them and other great social entrepreneurs in mind when he wrote, “Life isn’t a train ride where you choose your destination, pay your fare and settle back for a nap. It’s a cycle ride over uncertain terrain, with you in the cyclist’s seat, constantly correcting your balance and determining the direction of your progress.”

To Andrea and Barry Coleman, the direction of their life’s work has everything to do with making darned sure those motorcycles of theirs are also in fighting trim—their oil topped,  tires on tight,  engines firing on all cylinders—because Andrea and Barry, like Paul Farmer and Ann Cotton and all great social entrepreneurs,  are not on any old joy ride, tooling along in the groove, they’re on that cushion, braving the dust and the dirt, because that’s where you head when you mean to win.  And make no mistake about it, they’re out to win—to transform health care delivery, save millions of lives, and prove what’s possible.

Thanks so much.

 
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