I absolutely love that phrase.  I heard it at the Social Capital Markets 2008 conference this week in beautiful San Francisco, said by William Foote, Founder and President of Root Capital, on a panel I didn't attend but heard about later.  The phrase perfectly epitomizes the mood and underlying themes of the conference, and the panel I myself moderated, as well as the panel I was asked to blog about for NextBillion.net.

I love this phrase because I see the positive message within it, just as I tend to see the positive in most things, including my approach to business strategy which I call "disruptive leadership." which I've already blogged about here.

You could argue there is absolutely nothing positive in the word "pathological."   The Encarta® definition leaves little room for a positive interpretation:

 

path·o·log·i·cal adj

1. uncontrolled or unreasonable

2. relating to disease or arising from disease

3. relating to pathology or used in pathology

I follow the Dale Carnegie theory that he puts forth in his famous book, How to Win Friends and Influence People, in which he posits that humans are driven primarily by self-interest.  He writes that the only way to influence people is to speak to them in terms that either makes them feel good or portrays how you can help them.

(This post continues past the break; click "Read More" to continue)

... said Christine Eibs Singer from E+Co, referring to the way that industry has been able to achieve the "investment class status", raise millions in capital and at the same time operate under common standards under the leadership of organizations like CGAP.

The need for such a coordinated approach among those supporting "Small and Growing Businesses" is the starting point of the Aspen Network for Development Entrepreneurs (ANDE). A panel discussing the network marked a high point Tuesday afternoon during the Social Capital Markets Conference.

Andrew Stern, a partner at Dalberg, moderated a conversation among organizations representing some of the leading practices that are part of the network.

(This post continues past the break; click "Read More" to continue)

Jocelyn Wyatt leads the Design for Social Impact initiative at IDEO (a global design consultancy). Prior to IDEO, Jocelyn worked as an Acumen Fund fellow in Kenya and served as Interim Country Director for VisionSpring in India. Jocelyn has an MBA from Thunderbird and a BA in Anthropology from Grinnell College. She blogs (periodically) on www.jocelynwyatt.com.

By Jocelyn Wyatt

Fully admitting my bias here, I did think the Design in the Developing World panel was an especially interesting conversation between a top-notch set of designers and practitioners. Caroline Balerin launched the panel with the question "What would it look like to design for the other 90%?" I fully expected the panelists, who have traditionally designed products, to respond with something about appropriately designed technologies. I was pleasantly surprised to hear each of them respond with the need to design not only the products, but the systems around them.

Paul Polak noted that the design of tools is trivial compared to designing how to mass market them. Tim Brown followed up with the need for us to design the distribution channels, supply chains and marketing strategies to ensure they get to market and scale. "Breakthrough innovation in the developing world is happening by designing systems." Kristen Peterson built on this with a story about how Inveneo started by designing hardware, but realizing that wasn’t enough, has moved to building partnerships with local entrepreneurs who can distribute the IT services.  

The second point, which was made by Paul Hudnut, was the importance of empathy and the need to speak to your customers in a way that makes sense to them.

(This post continues past the break; click "Read More" to continue)

Katherine Fulton kicked off Day 2 of the Social Capital Markets Conference this morning. Her address focused on the complexities of this moment in history for the economy as a whole and for the social capital markets movement in particular.

Ms. Fulton addressed the driving forces behind impact investing and the social capital markets movement, Monitor's characterization of the current moment for the sector and the critical success factors to move the sector forward towards consolidation and efficiency.  

Money seeking diversification, values-driven investment, talent demanding new career paths and more individuals interested in combining money and meaning in their careers are just some of the driving forces behind this movement. The question is no longer whether it's possible to reconcile impact and return motives in investment but rather whether the space around it will be able to take off.

And by taking off we mean leaving its current period of "Uncoordinated innovation", as Ms. Fulton and Monitor describe the state of the social investment space. Can it become an organized and efficient space and leave its current "rudimentary moment", as described by Asad Mahmood yesterday?

(This post continues past the break; click "Read More" to continue)

It’s Tuesday morning at Social Capital Markets, and I’m already feeling a bit overwhelmed.  But this panel is too good to miss - Matthew Bishop, Jed Emerson and David Chen, with Kevin Jones moderating.  You know that – particularly with Bishop and Emerson – you’re bound to hear honest, blunt opinions on the social capital markets movement from this group.

Jed Emerson is the first to speak.  I’ve known his work for a while, met him last year at an Acumen Fund event - but I never knew he is trained as a social worker.  Having worked in San Francisco with homeless youth, he moved to work with George Roberts on the Roberts Enterprise Development Fund (now known simply as REDF).  While at REDF, he began to explore metrics in depth, which led to work with a range of social investors.  From there, he got involved in CSR and sustainability, which drove him to his most famous work – around blended value – and his attempt to steer the conversation towards "both/and" instead "either or".

Matthew Bishop has spent 16 years at The Economist, where in 2006 he authored a 14-page special report entitled "The Business of Giving".  The report led to a new book – Philanthrocapitalism: How the Rich Can Save the World – where he tries to answer a simple question: what’s real in the social enterprise space?  (NextBillion covered the philanthrocapitalism debate extensively this summer.)  In his words, we need to move beyond what works and what doesn’t and instead focus on rigor, concept development and “the need for this movement to succeed.”  What we really need?  According to Bishop, we need better research and data, “a step change in the quality of analysis for the social sector.”

David Chen is from Equilibrium Capital, where he thinks about this space from a very practical standpoint.  He discusses exit difficulties – IPO, acquisition – and the struggle not to sell out.  He suggests that it’s incredibly hard to structure deals that keep the meaning and the money intersecting. 

(This post continues past the break; click "Read More" to continue)

Guest blogger Mike Lee is a 2nd-year MBA student at the Haas School of Business at UC Berkeley and leads the Net Impact chapter.  Prior to Haas, Mike worked as an evaluation consultant for NGOs and Foundations and also at Ashoka.  Mike is an alumnus of the Coro Fellows Program in Public Affairs and has blogged about social enterprise on Skoll’s Social Edge site. He is a graduate of Harvard University with an interdisciplinary degree in Social Studies.

By Mike Lee

It’s great to be blogging here on NextBillion. Props to Rob Katz, Moses Lee, Francisco Noguera and many others for creating one of the most vital blogs around for us hard-headed idealists.
 
Today, I sat in on a stellar panel, titled "Money and Meaning." Not exactly an easy task for the panelists as those two words encapsulate much of what the SoCap08 conference is all about. Panelists – Will Rosenzweig of Physic Ventures, a $160MM venture fund focused on sustainable living and consumer-driven health care companies, John Goldstein of Imprint Capital Advisors, a mission-related investing advisory firm, and moderator Lucy Bernholz of Blueprint R&D – tackled this huge topic with insight and grace. 

The questions to be explored: How can capital be deployed in a way that serves the investor’s values and the social good?  And can our social values drive more effective investments? While 45 minutes was insufficient to draw any serious conclusions, the conversation produced several highlights for me.

(This post continues past the break; click "Read More" to continue)

Guest blogger David Auerbach works on strategic growth projects for Endeavor, a global organization that supports high-impact entrepreneurs.  He is a 2003 graduate of Yale University.

By David Auerbach

The "Market Creators" panel at SoCap08 provided an excellent primer in what opportunities are out there for investors looking to focus on both social gains and financial gains. As the moderator - Todd Johnson of Jones Day - observed, social returns come in many different forms: Wal-Mart's Sustainability 360 might have an enormous social impact. That doesn't mean a social investor would necessarily want to invest in Wal-Mart, however. So how do you sift through all the investment opportunities out there?

The panelists represented a variety of organizations that are looking to highlight social impact for investors. Mark Campanale started the Social Stock Exchange in London as a way to improve access to financing for socially-responsible businesses, such as children's hospitals and nurseries. Deb Dunn spoke to the power of Global Giving's online model for finding socially-responsible projects to invest in.

(This post continues past the break; click "Read More" to continue)

Asad Mahmood, who leads Deutsche Bank's social investing arm, took the stage for today's keynote address at the Social Capital Markets conference. His intervention closed the formal sessions that took place during the first day of conference.

I met Asad a couple of years back in Cartagena, Colombia, during a Microfinance conference where he was intervening. Back then he spoke about mainstream financial institutions entering the stage for investment in microfinance, and today he did the same but referring to the broader "social investment".

I thought he did a good job summarizing some key trends that surround this space, which some times seem difficult to keep up with given the pace at which new players and entrepreneurs seem to be entering the stage day after day.

(This post continues past the break; click "Read More" to continue)

With three weeks to go before the U.S. presidential election, it’s no surprise that there’s a lot of interest in democracy here at the Social Capital Markets conference.  Fortunately, the conversation has (thus far) steered clear of moose burgers and the Weather Underground.  After all, the democracy we’re discussing here at SoCap08 is actually related to democratic capital, not democratic governance.  

What is democratic capital, and why should the base of the pyramid community care?  Well, on a very basic level, the democratic capital panel is all about giving investors and borrowers the power to connect directly, without the intermediation of too many financial institutions.  This person-to-person connection takes the shape of four panelists and their social enterprises:

• Robert Chatwani, WorldofGood
• Mads Kjaer, MyC4
• Premal Shah, Kiva
• Tracey Pettingill-Turner, MicroPlace

(This post continues past the break; click "Read More" to continue)

Monday afternoon sessions just kicked off with the panels on each of the three tracks here at SoCap08. The "Social Entrepreneur Track" is of special interest to me, as it concernes the tools and skills needed to turn social entrepreneurs into sustainable and scalable organizations that can scale and successfully serve the poor.

Paraphrasing Moses Lee in one of his recent posts, the questions is how to turn will to serve the poor into business skills to do so in a sustainable and scalable manner.

The first panel in this track was on "Building a Business Plan", featuring panelists Kevin Braithwaite, from RootSpace, a business incubator based out of Lebanon and Kirsten Gagnaire, an advisor with the Social Enterprise Group.

A quick raise of hands at the start of the panel shows what could be an accurate diagnostic of this sector: When asked how many in the room were "early stage social entrepreneurs", around 80% of the room rose hands. A few minutes later Kirsten asked how many were currently functioning organizations and only a third of the initial hands went up this time.

(This post continues past the break; click "Read More" to continue)

Not yet.  That was the first message I heard at Social Capital Markets today, as I approached the registration table; they weren’t ready for me yet.  In fact, they weren’t ready for me, nor were they ready for the 20 other people who had queued up early.  If there’s any indication of interest in a conference or event, it’s usually the line of people arriving 2 or 3 hours early.  (No, they weren’t giving away iPhones.)  Read my SoCap08 conference preview here for some context.

When the table finally opened, I was greeted by a familiar face – Meredith Lobel, now a second year MBA student at Harvard Business School and formerly a tried-and-true changemaker with Ashoka.  She’s volunteering here at SoCap08.

Two hours later, the excitement hasn’t died down; in fact, it has steamrolled.  Thus far, I’ve run into other base of the pyramid and social enterprise veterans including Jocelyn Wyatt of IDEO, Margot Brandenburg of Rockefeller Foundation, Dev Appanah from ChangeFusion, Pradeep Suthram from the Social Stock Exchange and Ray Cheung from New Ventures.  I’m sure more will be filing in as the day continues.  (In fact, as I wrote that sentence, David Auerbach and Elmira Bayrasli from Endeavor took seats behind me, and I noticed Ted London across the room.)

(This post continues past the break; click "Read More" to continue)

The traditional talent support approach for base of the pyramid (BoP) projects has been a sending model: workers/professionals from the developed world are sent by an organization to a developing country to manage a local project.

The American Peace Corps was established with the intent of sending American volunteers in "helping the people of interested countries in meeting their need for trained men and women." Large multinational corporations have for decades sent their professionals from the developed world to start/manage local offices in developing countries.

However, the sending model can be very costly and be met with significant challenges. Studies have shown that international assignments can cost three to five times an assignee's host country salary per year. This is primarily due to cost of travel, relocation, and cost of living allowances. Outside of cost, there are also a number of other challenges for expatriates working at the BoP.

(This post continues past the break; click "Read More" to continue)

Guest blogger Jenara Nerenberg is the Founder of BOP Source. She is a graduate of UC Berkeley and Harvard University and lives in Kathmandu, Nepal, where she is a Columnist for a national business magazine and a Consultant on new media marketing.

Jenara was a Consultant to the Harvard Center for Health Communication and worked on cause-related marketing at the Harvard Business School and the Harvard Kennedy School of Government, bringing together leaders from YouthAIDS, MTV, and the academic community.

By Jenara Nerenberg

Manuel Bueno recently wrote a post about the need to go beyond basic needs business strategies to a more holistic approach when engaging the BoP in business. I thought I would take this idea up in the context of my own field, new media marketing. Below is what I think should be the marketing component of the next wave of economic and social value-driven businesses at the base of the pyramid, an area that I am currently working on at BOP Source.

Imagine the BoP using social networks. Think entrepreneurs, members of microfinance self-help groups, and villagers in remote areas of Nepal or Mongolia. Imagine listening to buzzing conversations of micro-entrepreneurs about their products, challenges, needs, ideas, and desires for collaboration.

Imagine an entrepreneur in the middle of her village who is literate with her elementary school education and who is now the chief ethnographer of her community, appointed by Nokia, Danone, Unilever, or any other large MNC.

(This post continues past the break; click "Read More" to continue)

NextBillion is heading west – San Francisco, to be precise.  Francisco and I will be on the road this weekend – along with 600+ fellow attendees – in preparation for next week's Social Capital Markets conference, which runs Monday through Wednesday in the city by the bay.  We'll have full coverage here on NextBillion, including guest posts from a stable of experts.

I'm excited, and more than a little nostalgic.  After all, San Francisco was the site of another conference, Eradicating Poverty Through Profit, which helped launch the base of the pyramid concept into the mainstream back in 2004.  On Tuesday, I was on the phone with Justin DeKoszmovsky, SC Johnson's Manager for Strategic Sustainability – and one of the company's BoP champions.  Justin and I first met at Eradicating Poverty Through Profit – he as a Cornell MBA student volunteer, I as a conference staffer with the World Resources Institute.  When I mentioned the purpose of my San Francisco trip to him this week, Justin laughed and replied, "It's amazing how far the base of the pyramid sector has come in just four years."

Of course, there are miles to go before we sleep.  But the Social Capital Markets conference may mark an important milestone in the BoP and social investment spaces.

(This post continues past the break; click "Read More" to continue)

In times like this, when clean energy technologies are the hype and talent in the sector is in high demand, Mathias Craig could have any job in the world. His training includes engineering degrees from both UC Berkeley and MIT, and his true passion is wind power. In stead of getting taking one of the job offers he got after graduate school Mathias decided to found blueEnergy Group and bring energy to underserved communities. He is now the executive director of the organization.

blueEnergy helps communities in the caribbean coast of Nicaragua develop sustainable energy systems through hybrid wind and solar technologies that are manufactured, maintained and operated by themselves.  I learned a lot from Mathias, his passion, vision and commitment. Like most entrepreneurs, he didn't have much time to plan at all when he decided to become one in such an isolated area. He just did it. Now he is living up to his dream, with all the ups and downs that entails.

Like everyone I met in GSBI, I will keep an eye out for Mathias and how he continues to build a robust organization and scale his initial idea. I wasn't able to get him on film in California but he sent us the following clip, recorded a few days ago while working with his team in the caribbean coasts of Nicaragua. 

Finally, make sure to catch Mathias' blog on Social Edge. You'll get a good feeling of the challenges he faces as an entrepreneur but mostly the drive and passion that keep him at the job.