Emerging Markets 2012

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The year 2011 included a number of highlights, including three trips to Latin America and one to Europe and Asia, and the chance to meet with over 200 entrepreneurs and founders as an early stage venture capitalist at Mohr Davidow. As one takes a step back, opportunities for disruptive technological change will increasingly come from beyond the G20, as the preponderance of global GDP will emanate from beyond traditional frontiers. Already BRIC has been supplanted by the frontier acronym, CIVETS, highlighting high growth markets Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa. While venture returns in the N-11 are still a few years off, looking at fundamentals like GDP growth, access to credit, increasing PPP, and underlying demography will impact cross-border trends. And while investments may stay at home, the imperative for global access to talent and ideas has long sailed.

I had the chance to speak about this and recent observations from a Fall 2011 trip to China on a panel on 2012 Global Projections at WilmerHale. In China the average “netizen” is 25, versus the average age of 42 in the United States. This necessarily disposes them to higher adoption rates in online categories of entertainment, social networking, and gaming. Fundamental social, political, and demographic trends provide a lens into likely technology adoption patterns. Whereas in 1995 the preponderance of the 50M Internet users were likely in California, by 2015 500M of them will be in China. By 2015 there will be 1.2B Internet users in the BRICs plus Indonesia. That’s mind-shifting.

In 2012 I will return three times to China to help manage our investment in Innovation Works, the Y-Combinator / Andreessen Horowitz of China, run by former head of Google China, Kai-Fu Lee. Additionally I look forward to keeping a finger on the pulse as a judge of Founder Showcase.

Becoming a Venture Capitalist

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After three years at Columbia University, I’ve completed my dual Master of Business Administration and Master of International Affairs, with focus in International Economic Policy.  In line with my belief that in the United States today, technology and innovation provide one of the higher contribution margins toward aggregate output, I’ve decided to become a venture capitalist.  While capital, and labor are vital factors of production, and I do not discount the importance of broader capital markets and education respectively, based on my interests in both development and entrepreneurship, VC is apposite.

In July 2011 I join Mohr Davidow Ventures, a Sand Hill firm founded in 1983.  I join the firm focused primarily on web, mobile, and consumer Internet ventures, but will gain exposure in Digital Health and Clean Tech as well.

Rage Within the Rocket Ship

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At the 30 Summit in September 2010, I delivered a lecture entitled “Rage Within the Rocket Ship.” My concept built upon something Facebook COO Sheryl Sandberg said to me over the summer, namely to “find your rocket ship.” The metaphor of the rocket ship can be applied to ideas, companies, or people, but one should agree with their velocity. And then climb aboard.

Building upon this concept, to “rage within the rocket ship” is to carve novel paths, not to accept status quo, and radically innovate – but sometimes best within organizations and ideas that are already moving 90 miles per hour. Inertia can be an asset, and coupled with outside-the-box, it can change the world. I spent Summer and Fall 2010 at Facebook, “raging within that rocket ship” to leverage its scale for global impact, social gaming for social good.

This Spring it’s Columbia finale. Graduate school has provided an education, and unparalleled (if expensive) opportunity to grow. From presentations in Paris to fellowships in Japan, business plan advising in Colombia to private equity deals in Morocco, Tahrir square in Cairo to the shore of Sulawesi, and finally to venture capital with Agora Venture Fund in Managua.

One windfall of rocket ships is getting to go “Mach 2 with your hair on fire.”

30 Summit Invitation

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I’m excited to have been invited to this year’s 30 Summit in New York City, where I’ll talk about technology applications in development, specifically learning I’ve culled from a summer considering these ideas at Facebook, Inc. For examples of ideas, please see my recent Stanford Social Innovation Review piece, Social Squared: Productive Gaming on Facebook.

In a recent press release, organizers share that “this Labor Day Weekend at University Settlement in SoHo, the Second Annual 30 Summit will allow some of today’s most promising young leaders to brainstorm and broadcast their ideas as the world prepares to grapple with its next set of challenges.

The format of the Summit resembles a combination of TED talks, the Aspen Ideas festival, and a Presidential Cabinet meeting.  Each Summit participant gets 30 minutes to present on a topic related to their work. Every presentation must have an interactive element and allow time for questions and answers, enabling the group to add to or push back on ideas, contemplate the cross-sector applicability of different concepts, and collaboratively engage in conversations around tough issues. As the ideas from the Summit percolate, participants continue their conversations beyond the weekend and carry them forward into their lives.”  Stay tuned…

Mchopa to 4 million on Google.org

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On July 20 we gained exciting exposure for Tanzanian artist Gregory Mchopa when my friend, Joshua To of BRUTE Labs, told our story of founding Mchopa.com on the official Google dot org blog.  Thanks to Google’s reach and use of new media, the post was instantly shared with over 4 million people, something we believe will translate into increased sales for Mchopa.

Check out “Open Source Altruism” on Google.org’s Blog.

For more on the challenges, check out my posts at Stanford and Yale, written just after some guy named Tony Blair.

Kiva.org Working Paper Release

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Today, I’ve released a working paper entitled “Kiva.org: Crowd-Sourced Microfinance and Cooperation in Group Lending,” based on original research conducted in the Cooperation Group at Harvard’s Berkman Center for Internet & Society.  The paper observes 120 Kiva “Lending Teams,” and evaluates whether their openness, size, and categorization does or does not impact group lending behavior.  The working paper attempts to create an empirical taxonomy of both the top- and bottom-performing Kiva Lending Teams, and seeks to better understand how coherence around various forms of human identity can impel greater  cooperation.  While this study seeks to better understand the cooperative dynamics of many-to-one and many-to-many crowd-sourced microfinance, the observations are fungible.

For more information on the March 2010 working paper release, please see:

Top 5 Stanford Social Entrepreneurship Opinions

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I was excited to hear the news last week that “Open Source Altruism,” a piece I ran in Stanford Social Innovation Review on November 2, 2009 was named SSIR’s second-most highly trafficked blog post of 2009, in under two months online!  Thanks to Andrew Hapke at Yale for forwarding the news, and to BRUTE Labs for the Facebook referrals. After last week’s Harvard Business School conference on Africa, and this week’s Columbia University SIPA conference on policy making in a digital world, I have put pen to paper on “Mobile Subscriber Growth in Africa” for the Harvard Internet & Democracy Project, and tried to cohere learning from the two venues in my new SSIR piece entitled, “Mobile: Increasingly On Call.”

Relative Social Values of Social Media

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With the plurality of online tools available today, managers feel the imperative of digital strategy, but few systematically incorporate elements of new media.  Based on recent consulting experience for a non-profit based in Medellin, Colombia, I’ve outlined a process to: 1) Understand users, 2) Build targeted channels, and 3) Transform traffic, in a Stanford Social Innovation Review column entitled “‘Tis the Season to be Online.”  However mere incorporation is not sufficient.  In a subsequent article entitled “Internet Exchange Rates,” I’ve questioned the face value of blind social media incorporation.  What is most important is that managers understand the hierarchies of online interactions.  One must understand trade-offs between resource allocation, and user cannibalization across forms of new media.  The relative value of each form of media depends on its context, and the extent to which it is the most effective form of communicating the new idea. The Internet exchange rate that indicates relative social values of social media credence is tomorrow’s currency unit.

Malthusian Mobile?

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As I outline in my latest article for Stanford Social Innovation Review entitled “Open Source Altruism,” the convergence of mobile is creating windfalls for problem solving, accelerating the potential for many-to-many, syndicated micro-task, or “crowd-sourced” activities to utilize human cooperation to address global collective action problems.

This week, Bruce Etling of Harvard’s Internet & Democracy Project wrote on the global penetration of mobile phones in his article entitled, “Mobile Phones Easier to Find than Food for World’s Poor.”  This week The Economist also ran a cover story on “Falling Fertility,” and how the world’s population problem is solving itself.  The Economist discusses how Thomas Malthus’ predicted that, given geometric population growth and arithmetic subsistence growth, an eventual and even expected convergence would yield catastrophic consequences.  However, today’s development has dampened fertility rates in the developed world, and as such, self-stabilizing might mitigate or protract such impending disaster.

Concurrently, with 4.1 billion mobile devices around the globe and population growing, but at a diminishing rate, there is imminent digital convergence. It’s Malthus all over again, but technology is overtaking humanity.

Josh Keating at Foreign Policy recently wrote on how the UN would distribute vouchers to Iraqi refugees in Syria via mobile, through specialized SIM cards. Mobile is enabling a new means of distribution, and instant access to individuals across the globe. M-Pesa is enabling mobile as a conduit of transaction, allowing users to use mobile devices to send and receive stores of value and units of account. FrogTek in Latin America is leveraging Google Android to create a platform for street vendors to manage sales, transactions, and inventory. The Extraordinaries in San Francisco is attempting to lasso our in-queue moments via on-demand volunteering to attain social missions.

Technology in Africa

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This week, with the help of Joshua To and Brute Labs, we launched MCHOPA.com.  The site features the iconic Masai paintings of Gregory Mchopa, an artist whom Josh and I met in 2007 while consulting for Google.org. Dispatched as Business Development Consultants and lecturers in TechnoServe’s “Believe, Begin, Become” national business plan competition, we read scores of business plans and advised entrepreneurs on framing problems, solutions, and market needs. It wasn’t until our break, however, that we met Greg, dusty Nokia in hand, pitching deals in mile-a-minute Swahili. We offered web services; he agreed to inventory supply; we promised to return him 100% of the profits.  It was a challenge to bring his art to the global market. This week we launched MCHOPA fit with transaction capability, and a custom back-end engineered for instant inventory management. While we hope to build the idea into a more modular platform for web-savvy emerging market entrepreneurs, we have encountered significant challenges along the way.  As I outline in this week’s piece for Harvard’s Internet & Democracy blog, Africa sits on the fulcrum of growth. However, while technology is changing lifestyles, it’s not yet changing livelihoods in Africa.  The OpenNet Initiative (ONI) released its latest review of the Internet in Sub-Saharan Africa, but broadband is but the first step.  In an article I authored this week in the Yale Journal of International Affairs entitled “Bringing Africa Online: Leveraging Technology to Enable Entrepreneurs,” I argue that “technology firms are key to injecting efficiency into financial markets, expanding access to credit and capital, and treating some of the development maladies across Africa.” I discuss the possible roles of public and private engagement, the potential for “Cloud Banking” or an Online Development Bank, and the impact that technology could have in affirming credit worthiness, lowering the transaction costs associated with risk assessment, and facilitating entrepreneurial debt-capital access for SME.