Tuesday, July 29, 2008

Using Business Wisdom For Social Compassion

This weblog has written posts on change-agent organizations or non-profits using fundamental business practices to increase their economic viability. When it does, it very often gets its ideas from The Entrepreneurial Mind, which wrote another article in this vein on 6/4/08, Business Turns Profits into Charity.

MyBusiness magazine (from NFIB) has a feature written by Emily McMackin on a for profit social venture called Giving Tree ....
... which sells the GiveCard---a prepaid Visa or MasterCard that allows recipients to donate 10 percent of their gift to the charity of their choice---Nicholas and cofounder Jeff Jacobs discovered that consumers were eager to give back.
McMackin interview me (Jeff Cornwall) for the story and was curious about the growing trend of more for profit social ventures.
Young entrepreneurs today are taking this tradition a step further by forming businesses to tackle specific problems in society, says Jeff Cornwall, director of the Belmont University Center for Entrepreneurship in Nashville, Tenn.
Without the IRS constraints that nonprofits have or the need to beg donors for money, these social entrepreneurs are finding more freedom to bring about change. Rather than trusting in these large institutions they don't think are effective, they're going out and solving problems at a grassroots level, Cornwall says. Given the interest we are seeing in students wanting to learn about social entrepreneurship, this is a trend that is likely to continue.

The New York Times ran a story on the same subject, social-entrepreneurship. This time though the focus was on Internet technology. When Tech Innovation Has a Social Mission - New York Times April 13, 2008.

diigo tags: innovation, web2.0, technology

Now a new style of “hybrid” technology organization is emerging that is trying to define a path between the nonprofit world and traditional for-profit ventures.They're often referred to as “social enterprises” because they pursue social missions instead of profits. But unlike most nonprofit groups, these organizations generate a sustainable source of revenue and do not rely on philanthropy.

Revenue is life blood for an economically viable entity, whether it is a corporate business, a entrepreneurial artisan or a social-entrepreneur. Revenue usually derives from some form of value added or productivity enhancement, though who provides the revenue and who benefits from the value-added may not always be the same.

Brewster Kahle, who has founded a number of successful Internet companies, as well as the nonprofit Internet Archive, said: “If we do this right, I think there is momentum here. The next major operating systems company might be a nonprofit.”
Mr. Kahle says he is developing a set of principles that he hopes will help formalize his idea that there is a middle ground between the technologists and the capitalists. He ticks off operating guidelines like transparency, staying out of debt, giving away information and refusing to hoard.
TechSoup distributes products from 32 commercial companies, including Cisco Systems, Microsoft and Symantec, to roughly 50,000 organizations annually, for a small administrative fee.
“We were just trying to meet the needs of nonprofits,” said Rebecca Masisak, co-chief executive of TechSoup.
“Computer technology and the Internet are lowering the cost of doing business,” said John Lilly, the chief executive of Mozilla, the Web browser developer that is being subsidized by advertising revenue from the search engine business.

Overcoming Copyright Concerns aka Making Sure You Get A Paycheck

David Pogue of the New York Times has been mentioned in this weblog before under a similar subject, the The Generational Divide in Copyright Morality. Here Mr. Pogue asks Can e-Publishing Overcome Copyright Concerns? - New York Times on May 22, 2008. This time he seems to have been attempting to offer some business advice to artistic entrepreneurs. The question of copyrights has been linked with the question of fair use in a number of posts. It is a double-edged question. One wants to protect the concept of fair use, but the individual artist finds himself at risk. Mr. Pogue asks the unresolved question.

"What is the writer or musician to do, though, if she can't earn money from her art? Simple, says the Slashdotter: earn your money playing live (if you're one of those musicians who plays live), or selling T-shirts or merchandise, or providing some other kind of 'value-added' service. Many such arguments seem to me to be simple greed disguised in high-falutin' idealism about how 'information wants to be free.'

This weblog has passed on advice from both the artistic perspective and the business perspective. A week after his article (May 29, 2008) Mr. Pogue received advice from his readers, though he was reluctant to take it. From the Desk of David Pogue - Readers Have Their Say in the E-Publishing Debate - NYTimes.com

Last week in this space, I agonized over the issue of releasing the books in my Missing Manual series in electronic form.
A number of passionate writers were confident that releasing free copies of my books would lead to more sales of the printed ones, not less. These people could not understand why I don't see that:

Mr. Pogue has every right to provide his product or services to the public as he sees fit and if he doesn't want to make them available free online, so be it. Not everybody is comfortable with all aspects of e-commerce. How useful his advice is though to struggling artists in another question. I am not certain that he even addresses the question. I am summarizing the question here, partially because of copyright concerns. The questioner is not asking Mr. Pogue to provide the materials for free. He is asking him to consider alternative avenues of sales/revenue and challenges him to do a test.

"All you have proven is that there is pent-up demand for an electronic version of your book. Your conclusion is only valid IF you had a legitimate electronic version to sell, and people chose to get the free one instead of the paid one.
Even if your book was on a pirated site, people (like me) would buy a legitimate non-DRM'd electronic version if you sold it. Until you do, you cannot make any claims about digital piracy from personal experience, because you haven't done a valid test."
Mr. Pogue's response: This is the crux of the matter, really: *nobody* can do a valid test. Some authors (like Cory Doctorow) point to anecdotal evidence that free e-versions boost the sales of printed books; other authors (like Stephen King and Steven Poole, whose blog I quoted last week) declared their e-book experiments failures. But a truly valid test will never be conducted because it would require parallel universes:

Mr. Pogue's response would be valid entrepreneurial advice if the questioner was applying for a job at CERN, but artisans in a new economy won't be able to wait for such a perfect universe(s?). I suspect that Mr. Pogue's position is based more on his view of the "morality" of the issue. Morality is in quotes not to question Mr. Pogue's ethics, but in recognition that it is not as straight forward an issue as some may claim. Does the artist need to give away his creativity because Slashdot thinks 'information wants to be free'? - No, but if the artist finds that selling t-shirts and using the music for marketing is a better business model than selling music and using the t-shirts for marketing, they better give it some thought. The old paradigms are gone.

diigo tags: web2.0, entrepreneurship copyright epublishing, pogue,