SustainableWork

I really love these photos (click to enlarge), and their stories below.

The top photo is Ms. Chantal Dolou from Togo.

The bottom photo is Mr. Allahverdy Kuliyev from Azerbaijan.

I met them through a Christmas gift I received last year. It was a gift certificate allowing me to invest the value of the gift in loans to small, independent entrepreneurs working with the organization, Kiva.

Kiva lets you lend to specific entrepreneurs in the developing world - empowering them to lift themselves out of poverty. If you like, you get to follow the stories of these entrepreneurs and track their repayment rates. When the loans are repaid, Kiva gives you the opportunity of investing that money in other entrepreneurs.

Loan requests are small by the standards of the developed world. You can sort through Kiva's introductions to aspiring entrepreneurs on their web site. After choosing one or more, you apply the amounts you wish to loan. Your loans are aggregated with those from other Kiva sponsors. When the requested loan amount is achieved, the loan is distributed to the entrepreneur.

I've posted the stories about the entrepreneurs I chose below. I especially like the photo of Ms. Chantal Dolou. I would take Ms. Dolou to any business meeting on any continent and feel confident she would succeed. I know that look. Mr. Allahverdy has a wonderful story that engaged me immediately.

The best part of that Christmas present is the news 1 year later, that both loans are nearly 100% repaid. I will soon get to look for more great stories and wonderful ideas to support. A gift of entrepreneurship that keeps on giving!

I believe Kiva is providing the world with a great service. Like all true entrepreneurs, they have found a problem and are helping fix it. In Kiva's case, the execution of that fix is very well done.

There are many other great organizations worldwide working on micro entrepreneurship and micro finance. I'm in contact with some and receive newsletters from many. I will put up posts about these in the future.

Let's also remember that there are many micro entrepreneurs among us here. In fact, they/we are everywhere.

When you make your choices for all manner of decisions, choose to support the innovators. Choose to support hard work, diligence, vigilance, and courage.

The renaissance age of entrepreneurship is here, and it's just beginning - around the world and, hopefully, around your kitchen table.


Kiva

Ms. Chantal Dolou. Ms. DOLOU, born in 1972 in Gbodjomé in the Prefecture des Lacs in southwest Togo, is single with two (02) children and one sister in her care. She comes from a very poor family and did not have the chance to pursue thorough studies. She became involved then, by her own means, in the trade of basic need food products. To strengthen her business, she benefitted from a loan of $350, which she managed well and repaid without incident. Today, this business continues to grow and necessitates increased loan capital which is unavailable.

Mr. Allahverdy Kuliyev. Allahverdy Kuliyev has been engaged in this business since 2003. Before he rented this tea-house. Having borrowed the loan amount of $400 he bought tea-pots, chairs, tables and this tea-house. He has a lot of clients. His tea-house is a small and he wants to expand the area of his place. All in Absheron region talk about the taste of his tea. Clients have rest over a traditional cup of refreshing Azerbaijani tea in his tea-house. His tea help to people to forget about their problems. He supports to his family with this business. He is 52, married, has 3 children,

Labels: entrepreneurship, funding, innovation

An interesting report was just released by an angel funding network in my home state of Wisconsin.

I focus on Micro Entrepreneurship where self funding and micro funding is the norm, but there's all kinds of early stage financing possible these days, and the game is getting more interesting by the day.

If you're in an enterprise that's considering an early stage investment round with outside investors, the news is hopeful. A rising financial tide seems to be lifting many small boats.

The two pieces of the report I find interesting are the comparisons of the overall volume of early stage investing with investments placed by the formal angel groups.

"Early-stage investing: Total early-stage investing tracked in Wisconsin rose to $102.9 million in 2006, an increase of 54 percent over 2005. The complete early-stage risk capital market includes angel networks, individual angels, informal angel groups and early-stage funds. Improvements in reporting could account for some of the increase in individual angel investments, which was a new reporting category in 2005."

"Angel investing: Angel investing in Wisconsin rose dramatically in 2006. Data from several sources confirm that angel investing in the state rose much faster than the national average, estimated at 11 percent by the University of New Hampshire Center for Venture Research. The number of Wisconsin group angel investing deals and dollars invested increased substantially in 2006 when compared to 2005. The dollar amount of network investing increased 38 percent to $7,427,170 while the number of deals rose 50 percent from 18 deals in 2005 to 27 deals in 2006."

Obviously, when you take in all early stage investors, the total will be much larger than taking just the totals from the formal angel networks. $102.9 million VS 7.4 million is quite an eye opener though.

When you work the math the average deal done by the formal angel networks is about $275,000 per deal.

Having been through these wars, I know that the larger pool of seed stage investors includes investments that are much smaller than the network angel deals.

Conclusion? If you're an enterprise that needs outside funding in small amounts, avoid the formal angel networks. You're wasting your time. However, if you're looking for smaller amounts, it appears the world is turning your way.

There is some VERY interesting news about some of the bigger venture capital firms leapfrogging both of these financing levels into the world of micro finance, but I'm saving that for another post.

In the money world of small biz financing, it's a jungle out there friends, but you can do it. The world is looking for your creativity and your drive.

Go get 'em.


Download full text at WI Angel Network (WAN)

Labels: entrepreneurship, funding

Alan Kay said “The best way to predict the future is to invent it.”

And now, my enterprising friend, there are companies set up to do nothing but invest in innovation.

Nathan Myhrvold is an innovation pioneer. He started guiding this field to some pretty interesting ground back in 2000. His company, Intellectual Ventures, is a platform for creating invention, and specifically intellectual property. These folks work in high tech, but Mr. Myhrvold speaks from a really unique bully pulpit for many of us, I believe.

In a recent interview in IP-Investor.com, Mr. Myhrvold talked about wanting his company to become a model for creating and supporting new innovations in many fields worldwide. “I think that the great business innovation in the first part of the 21st century is going to be this: treating inventions – and patents, as the specific legal form – as a first class asset”

He goes on, “If we’re successful, and if the world follows us – and I hope the world follows us – and 10 years from now there’s 50 of these funds or 100 of these funds, that will channel billions of dollars into the hands of inventors and inventing organizations.”

The way Intellectual Ventures is proceeding is controversial and exciting. I come out mostly on the side of IV. Read more from the links below to make up your own mind.

What’s reassuring for me is that, on the topic of innovation and invention Mr. Myhrvold, who specializes in bleeding edge high tech stuff, also holds very pragmatic, old school views about business innovation and growth. This leads me to conclude both his feet and his ideas are well grounded and that there’s hope in this direction.

One break from tradition I liked is IV’s rejection of the ‘not invented here’ syndrome. They acknowledge that the minimum time from conception to patent is about 3 years. I’ve found this to be true. For folks without IV’s deep pockets it can be much longer.

Their own in-house solution is to grow through external partners. According to Mr. Myhrvold, “So, in building our business, we realized that we were not going to be able to address a lot of our potential opportunities for such a long period of time, that it made sense to do a combination of both - doing our own invention and investing in others’ ... the other ones (are) already done. It’s a way of buying yourself five or six or 10 years into the future.”

Innovation is in the air, my friend. Everybody wants it. The world needs it. Patents are part of the Intellectual Venture story, but they are not necessary for everyone’s story. Start ups and early stagers need great ideas, but for most of us, there will never be a need for patents. (Intellectual property, yes, but that’s for another post.)

What I find really hopeful is that the entrepreneurship behind the innovation is in equal demand. If you can develop reproducible solutions to real problems, your enterprise can find support from many directions, public and private. If the Intellectual Ventures model thrives, it will be copied and reproduced and morphed across many industries and sectors of life.

The future is inevitable. Getting there is never easy, but the process is as inevitable as gravity. You’re going to work with the future or against it, but the future is going to happen.

Countless generations of hard working people sacrificed to get you to this renaissance moment of economic opportunity.

You can do it. Invent, innovate and create your future. If you can partner with others to get there faster and smarter, all the better. Just don’t miss the opportunity to act.

I wish you well.


Intellectual Ventures web site

The Dec 5, 2006 IP-Investors.com interview with Nathan Myhrvold is available in PDF format from the IV link above.

Business Week article July 3, 2006: Inside Nathan Myhrvold's Mysterious New Idea Machine

Alan Kay info on Wikipedia

Labels: funding, innovation, startups

I was turning wrenches with my partner Dave recently as we worked to get a recycler out the door. Normally I’m on the road peddling these devices, and it was nice to have the face time with my friend and fellow warrior.

In reminiscing about our start, Dave reminded me that 8 years ago we’d each invested a grand total of $3,000 to start our business. We now have customers on 6 continents, meaningful international awards, and a rocking business model.

The current big push for starting up enterprises typically begins with business models that require you to search for outside capital through formal business funding channels right out of the gate.

This isn't necessarily the only path to follow. Many great enterprises were created around business models that didn’t start with formal investment funding. They were started with savings or with small investments from family or friends.

My recommendation to friends starting enterprises is that it's smart to start small if you can. Start part time if you need to. There’s no shame in this at all (I put up a post about starting part time dated 5/10/05). Try to do it with your own money first. If you can’t cover all of it and if the sums are modest, you can consider small investments from people who know you. This is not the time for you and your enterprise to be courting strangers. Your seed investor(s) should only come from people who know and like you. Many start ups need more formal funding avenues. But many more do not.

If you follow this route, I’m going to suggest a method for creating sustainable investment transactions for early stagers. I call it commission venture investing. The start up model offered by commission venturing begins the repayments to your investors immediately in the form of commissions from every transaction. This creates wonderful built in feedback loops for all involved.

Diving headlong into the outside funding game is very time consuming, full of dead ends, and you can easily end up with people in your shorts you may not want there.

You’re not a bad entrepreneur if you think you can start without jumping right into the formal funding rounds. Don't accept the premise that you have to go after outside angel investors, venture capital, or state and federal grants to start an enterprise. Go try out your ideas. Test your solutions in the real world first. Learn your story. Learn to tell your story.

Get out there and make the many mistakes awaiting you. Celebrate the small victories. These will help craft the destiny of your new enterprise. Time and small scale failures are immeasurably wonderful gifts to give yourself and your start up. The creative serendipity arising from mistakes can be the most productive moments of your enterprise life. More valuable information can be learned from the gleanings of what went wrong than can ever come from happy-dancing around what went right.

However, it’s MUCH harder to work through these valuable mistakes and small victories after you’ve entered the formal business funding rounds.

If you don't have enough funds available to start, family and friends can be considered as seed funders, but only if you approach this process very carefully. The end result should be first and foremost, that after the transaction has run its course, you're still family and friends. Full transparency and full disclosure with your seed stage funders. If you can’t operate this way, stay away from your family and friends, because you don't deserve them.

Creating new enterprises with family or friends involved is an opportunity that requires strict discipline to work. Commission venture investing, with its built in immediate feedback loops, offers a scalable model that can benefit all involved.

Rather than promising repayment of the funding from profits to be earned at some future point (if your model pans out), start the payback from the first sale. By this I mean paying out an agreed upon percent of monthly revenue, not profit. Repay your funder(s) with a percent every month’s sales until everyone is made whole.

Your funder(s) see immediate results, even if small. It’s also good for your start up. Commission venture investing requires that you have a firm understanding of all your costs. If the investment payback requires that you charge more, good. At the start of your enterprise, you should be charging more anyway, I promise. Might as well include their repayment portion and get it over with. Even if your enterprise achieves toasthood, your funder(s) will have been repaid in some measure. If you make it through this investment round and everyone is paid back, you’ll be operating at a higher profitability level.

Your accounting responsibilities will require that you operate in full transparency with your funder(s). Your books will be managed by a Certified Public Accountant who is also your in house ethics committee and the core of your financial marketing program. Any intelligent investor will want the authentifications provided by a CPA.

There is also an important side benefit for the larger economy as well. Many people want to invest in entrepreneurship and innovation, but don’t feel they can for various reasons. Commission venturing allows all of us to participate down to the micro level. Funder side, enterprise side. All of it at the appropriate scale for everyone involved.

Nobel Laureate Mohammad Yunas of the Grameen Bank has shown that the micro loans his organization makes creates many wonderful sustainable enterprises. Most important, those loans are paid back at rates far better than typical bank loans.

One of the main reasons is the feedback loops Mr. Yunas and The Grameen Bank build into their loan process. Often the recipients have no experience with economics at any level, so peer involvement becomes important for all involved.

In commission venturing, I see a similar feedback loop, except appropriate for the scale of the economics involved. The funder(s) have full access to your transparent books. They get regular feedback (payments) on the progress of their investment. They want you to succeed, and you’ll be working hard and smart to do so. You will also come out of your seed stage rounds with a far less complicated ownership structure that traditional venture investment models would have created.

This is not a Luddite screed against the more formal venture capital routes. On the contrary. As your enterprise grows into the 21st century, you’ll most likely need the outside resources of angels, venture folks, development orgs, etc. When you get to that level you’ll need to have documented that you have the discipline and the track record needed to execute at the next tier. By demonstrating that you’ve ventured through the seed stage with documented, successful results, you’re earning your eBay stars, and are capable of taking the next steps.

The start up game is changing fundamentally, with over the top positive news for entrepreneurs and the economies we operate in. Many terrific new support programs are now available with more appearing daily it seems.

However, don’t consider that you are shut out of the game if you can’t muster the personal or professional resources needed to start your enterprise with institutional investors. That path is important but over-hyped for many of us.

Commission venture investing can offer a more valuable scale and a more manageable model for seed stage start ups. It creates trust, and it creates returns for your funder(s) from the first transactions. It’s exciting and helpful for all involved. It invigorates the process with a sense of ownership and pride in the enterprise that makes for a great feedback loop. It also requires good discipline from you and all your business processes, especially accounting. I think commission venture investing can evolve into a new form of early stage seed funding that will benefit everyone, from the smallest ventures and the smallest investors right up through global economies.

Don’t be intimidated by the jargon of professionals talking about entrepreneurship. Their approach can quickly intimidate anyone new to the game.

Fire up your dream. Find a problem to fix and build your enterprise around your solutions.

With good planning, you can start your enterprise your way. Kitchen tables, notebooks, pencils (with LOTS of erasers) and all the low tech, small money solutions you can muster are perfectly valid tools for launching your enterprise.

Commission venture investing can work for start ups and small investors alike, especially at the early seed stages.

Go get ‘em, friend.


Mohammed Yunas, 2006 Nobel Peace Prize winner and the wonderful Grameen Bank. You can check threir loan and payback info right from their home page. My kind of transparency. My kind of heroes.

Labels: funding, innovation

There is a lot of hype in the enterprise biz.

Everybody wants to promote new business creation and talk about the importance of emerging enterprises.

The talk is typically just that. Talk.

The intention to support new biz and emerging enterprises is honorable. Creating false hopes when there is no plan for helping is bitter.

When the sun sets and you're fighting cash flow in the dark by yourself, honorable intentions are hard to deposit in the bank.

Women entrepreneurs face start up hurdles that can be especially formidable.

I came across a nice site aimed at helping women entrepreneurs that I've linked below. The organization is called Count Me In. I don't know anyone who has used this group, but their approach looks quite good.

Count Me In specializes in making the first loans to women entrepreneurs. From $500 up to $10,000 for the second loan. The loan scoring procedure is geared toward women, which is not at all typical.

I'd recommend that my women friends who are poking at the enterprise path check out Count Me In. There is a nice set of free resources on line as well as access to information about their support and financial services.

Interestingly, their program has tapped into a free market solution for building national resources in this field by teaming with American Express and others to create a program called Make Mine A $Million (M3) which is designed to create a network of one million women-owned businesses earning $1 million in revenue by the year 2010.

This looks like the kind of help women owned start ups and emerging enterprises can turn to for real resources, not just good intentions.

I wish you and Count Me In all the best.

Count Me In

Labels: funding, startups, women entrepreneurs

I guarantee you will remember the first time you see colored bubbles.

Bubbles that kids blow, except well, blown into spectacular colors. Technicolor bubbles. A zillion pixels per inch colored bubbles. Hot pink bubbles. Neon green bubbles. Yellow and orange bubbles. And when they pop, the color and the magic disappear until you do it again. And again. And again.

Colored bubbles will be on the market early next year. And you doubted that the world is getting better...

My report from the world of invention and innovation this week leaves me slack jawed and thunderstruck with admiration.

I'd never thought of a SustainableWork Hall of Fame, but I've decided to invent one just for Tim Kehoe. I'm making Tim the first endowed chair of kitchen sink innovation. Emeritus Professor.

I bring you an enterprise story that I hope will be long told and widely celebrated.

The December '05 issue of Popular Science has a wonderful, compelling story that is important for all of us.

"Tim Kehoe has stained the whites of his eyes deep blue. He's also stained his face, his car, several bathtubs and a few dozen children. He's had to evacuate his family because he filled the house with noxious fumes. He's ruined every kitchen he's ever had. Kehoe, a 35-year-old toy inventor from St. Paul, Minnesota, has done all this in an effort to make real an idea he had more than 10 years ago, one he's been told repeatedly cannot be realized: a colored bubble."

Well, Tim did it. The first cool result is that you'll soon be able to blow brightly colored bubbles. The more important lesson from the story is that persistence, hard work, and a respect for capturing details is critical. The you-better-get-this part of the story is that we all should celebrate and support great science and engineering.

First the upside stuff. Popular Science senior associate editor Mike Haney writes, "According to one industry estimate, retailers sell around 200 million bottles annually—perhaps more than any other toy."

"If an inventor could somehow add color, though, suddenly adults might have reason to start blowing again. Picture bubbles in NFL team colors, or bubbles that match charity ribbons. The potential market would grow to include every man, woman and child. So why don't they exist?"

This is a big commercial deal. Schools, fundraising, unlimited commercial PR potential. Close your eyes and imagine bubbles to match the wedding colors. Need I say more? 200 million units of anything is a monster number. Tim and friends have the potential to lay siege to that entire number and probably sell more than that by themselves, directly and through licensing.

Meet Mr. Tim Kehoe from St. Paul, Minnesota. 10 years ago Tim conjured up colored bubbles out of thin air. Magic idea, if only you could make it work.

Tim Kehoe, wife and family have lived the life of citizen innovators ever since. Cool stuff. Scary stuff. Tedious stuff. Their stuff.

Experiments went on for years. Great stories of innovation all-nighters. Hope led to painful rejections. Products rolled out before their time rolled straight into disaster. Job life, family life, and enterprise life all swirled about like Toto in the Kansas wind for over a decade.

Tim Kehoe chased his idea in and out of self employment for over a decade. If you think there's a direct line to enterprise success like you see on TV, meet Mr. Kehoe, the real deal. His story is a truthful representation of what much of innovation and enterprise success looks like. It's a story that should be richly celebrated by all of us.

Tim's enterprise funding has gone from home-made to angel-based, and it's making his dream work. Earlier outside funding might have helped, but it also could have screwed up the end result. I think the most important part about outside funding is not about how you get the money, but when. Tim's timing here looks dead on.

Another critical part of outside funding is what the entrepreneur brings to the money. Tim brought years of struggle and determination to the table. He brought his fire which couldn't be quenched by the repeated cold showers of start up roadblocks. Importantly, Tim brought years of knowledge of what didn't work. Those failures weren't defeats. Tim used them as refinements to a great story. He kept putting one foot in front of another, always improving the idea. Whatever it took.

Passion is a biz buzz word now. Unfortunately, passion typically gets translated as smiling people talking loudly.

But Tim's case is the real thing. Passion for the idea. Passion for the story.

With that in mind, Tim brought in money and brains.

Fortunately, not just any brains. Tim connected with the wonderfully determined brain of Mr. Ram Sabnis.

Great timing for all involved. Mr. Sabnis is a PhD dye chemist with dozens of patents.

His scientific specialty, among the most specialized in the world, led him to develop an entirely new dye chemistry. Something from nothing stuff, bless him. "Nobody has made this chemistry before," Sabnis says. "All these molecules - we will make 200 or 300 to cover the spectrum — they don't exist. We have synthesized a whole new class of dyes", says Mr. Sabnis.

Ram Sabnis’ story of 60 to 100 experiments per weeks for many months is well told in this article. Great science with a wonderfully colorful, magical ending.

Will Tim and Ram ride this story straight into sure-fire success? God I hope so.

What you need to remember friend, is that it started at a kitchen sink. It's taken longer than anyone involved expected, I'd bet. I'd also bet that, looking back, they wouldn't trade any of it.

Neither would you.

In the future, whenever you see a colored bubble float by (and you WILL see a lot of them float by) remember the story of Ram Sabnis and Kitchen Sink Emeritus Professor Tim Kehoe, our first SustainableWork Hall of Fame inductee.

A really wonderful enterprise story.

Now, friend, go find your own kitchen sink.


Popular Science article by Mike Haney

Photo for this post borrowed from Popular Science Magazine article.

Labels: entrepreneurship, funding, innovation, startups