Category Archives: Value metrics

Branding the Regenerative Capital Fund

I like the idea of describing the thesis of the Regenerative Capital Fund as a bridge between the ideas of John Fullerton at the Capital Institute and his co author Hunter Lovins and the ideas of Morgan Simon and Andrea Armeni and her team at Transform Finance. If it works, we will be a fungible anecdote for two related, aligned but not yet actively partnering, as in making common cause, for two groups of thought leaders.  We can, if we do this well, be an example each one uses to illustrate how a fund would make use of their ideas,  as they explain to people how the world should be. We want to be one of the funds they point to as an iconic example.

My simple formulation of our thesis is we are about biodiversity meets inclusion at the corner of non extractive profits. Good Capital Holdings in investing in the General Partnership of the fund, (one of three we are investing in)in order to inform the thesis; the truth they are trying to prove and show the world. Shaun Paul is the managing director, with Ed Dugger the transaction guy and the one who has sold institutional players.

It’s really that simple. They carry our story everywhere they go. People who want to get serious about those ideas find us. We have a sidecar donor advised fund, (DAF) so the average person who can put up $5,000 can invest directly in our companies, or in us. We give them the choice; we have to validate our position as an intermediary in a transparent marketplace. We could even be paid with tips, like Kiva when they saw something good they realized we had a significant hand in.

I am thinking of ways to make our fund communal, partly owned by the community, easily, maybe through local lending clubs, which also let people put in small dollars. There is one forming here that I will be participating here. I plan to invest in Accelerating Appalachia this fund’s sister accelerator through that. I could not find a way to invest in a single seed stage company was in line with our Good Capital Holdings thesis. We are investing in horizontal ecosystem infrastructure. My continual push as I work with RegenCap is to push for the best story. Shaun and my own good sense will moderate that desire to make the story I want conform to reality. It will be fun.

Iirro Niemi and Anna Blume got us this far. I am excited to continue to work with them.

We also plan to tell this story as kind of road to SOCAP14 building the Regenerative Capital Fund reality series with this blog cross-posted on the SOCAP site. We will also open that platform to other funds which are forming.

Overall, my goal this year to light up and connect the nodes in my network, from the Impact Hubs we now own and operate in TriBeCa, Philly, San Francisco and soon DC with SOCAP and the funds and companies Good Capital Holdings (GCH) is investing in.

The role of interdisciplinary data and stories

Microfinance has grown into a multi-billion dollar asset class extending financial services to the world’s poor because sufficient data was made available to investors to unfold a new way to understand risk and opportunity
Well communicated data, science & stories will unleash pent up demand to accelerate investment and business practices  that further resilience in biocultural landscapes.
The Bio-cultural resilience has a goal of not reducing narrative value down to commodity spread sheet value.

Considerations for M&E capabilities during Farmerline’s early-stage pilots

In the past week, I’ve been working with the Farmerline team on how we can take the next steps to expand while in the middle of a pilot (and beginning another). Farmerline plays an integral role in getting stakeholders the information they need to better manage crops, reach markets to sell those crops, and appropriate market prices for inputs and outputs. One of the toughest things I am constantly thinking about is what will be able to prove our business model. Right now, they have had strong interest from non-profits with large groups of beneficiaries, but the hope is that farmers would be able to pay for the service to sustain business. While all its value-added services are extremely important in the process of getting vital information to farmers in Ghana, what do farmers demand the most? Right now, they need information from non-profits and government to reach the market and manage crops. But what services do they demand where the net benefit of Agro-Calls and Call-Ins is positive for their growth? At this expansion phase, we know we have to take advantage of growth at the right time and make decisions quickly, all of which is difficult while in the middle of the pilots.

The uniqueness of Farmerline is a combination of ease of use, wide applicability and its specific focus on small shareholder farmers. At a glance, this seems like a win-win for so many organizations working with differing cultures, languages, and access to a mobile phone. I’ve learned that in Ghana, the country in which they operate, researchers have cited up to 91% of the target population for mobile use is saturated. The vast use of mobile phones has seen an explosion of apps targeted at solving deeply entrenched social issues, but the new space has created what one article from SSI calls “pilotitis” (Khan & Joseph, 2013). Writers Khan and Joseph highlight the need to move beyond the “conceptualizing and testing phase” in order to “catalyze systemic change” (Khan & Joseph 2013). This “innovation cult” drives inventors to seek new solutions to endemic problems, which is inherently good, but ultimately change needs execution to scale. Even though the founders developed this technology as they themselves lived and worked on smallholder farmers, wide adoption is still key to success.

One of the suggestion the authors recommend is “linking pilot approval phases to the solving of associated executional demands” (Khan & Joseph, 2013). For us, each hypothesis Farmerline posits during its pilot can have a decision-making step once it is proved or contradicted. That way, we can hopefully take advantage of quickly moving opportunities and adapt the product to how farmers and stakeholders best need it. One of the benefits of having a widely applicable technology is that during the pilot phase, Farmerline will be able to test which of the umbrella options in its technology are most beneficial. For non-profits seeking monitoring and evaluation technologies, the Agro-Polls technology is tailored to their needs to compute statistics and qualitative research. But in testing the buying power of individual farmers or farmer-based groups, Farmerline can understand if calling in a hotline or receiving weekly/monthly subscribed updates is worth paying for to help them increase yield and reach access to market. As we work to scale the current services, we focus on these needs.

As I think about the BCR tool in relation to how Farmerline enhances monitoring and evaluation, it becomes tricky. We are currently facilitating better M&E for nonprofits with our real-time dashboards that come with polling systems. Real-time data collection and analysis is possible for non-profits. The key is to make the product sticky enough so that when the pilot ends with a non-profit, its beneficiaries will realize its benefits. The flexibility of the pay-as-you-go platform creates affordability for low-income farmers, and allows nucleus farmers to regularly send updates to the hundreds of smaller farmers they support. After testing the nucleus farmers’ receptiveness to the service, Farmerline could then develop in-house M&E tools that measure farmers’ increases in yields and productivity since the time they have been using their ICT. At this pilot stage, developing potential impact metrics to put in place later on will test M&E capabilities. As an ICT organization, Farmerline addresses very specific pain points along the agricultural value chain; however, quantifiable impact is more indirect as it allows faster communication and facilitates better management practices among stakeholders. Providing in-house workshops on BMPs is one example of how direct impact can potentially be linked to Farmerline’s services.

Sources: http://www.ssireview.org/articles/entry/embracing_the_paradoxes_of_innovation

 

Putting Oceans & Fisheries on the Agenda: Accelerating Sustainability in Business for Nature in Crisis

It’s been an energizing and intense week working with project partners around the world to articulate a vision for building the Operating System for the Good Economy that begins with….building biocultural resilience for oceans and fisheries. I am sharing a summary here.

Fisheries Resilience Project Summary

Fisheries industry in Beruwela

Fisheries industry in Beruwela (Photo credit: Dhammika Heenpella / Images of Sri Lanka)

An updated powerpoint describing our accelerating biocultural resilience

I am sharing here an update to our presentation.

https://bioculturalresilience.files.wordpress.com/2013/06/accelerating-investment-in-biocultural-resilience-4-jun-13.pptx

Mapping the Operating System for the Good Economy from Farmerline outward

Working to help an efficient mobile messaging platform that does metrics and evaluation (M&E) while helping entrepreneurs make more money, save money and do their jobs better is where we are starting as we evaluate what part of the Operating System for the Good Economy is already in software. We are doing our experimental pilot of how we work with tech companies with Farmerline.org and Alloysius Attah II. His growing platform already has people centered M&E. His goal is to add planet focused M&E functionality. We are also working with NYU journalism student Dezelle Bennett who is running this Indigogo campaign to finance her trip to Ghana to do a video on Farmerline. We have a Frontier Market Scout, Katie Athaide, working on helping Farmerline, too.

Selling justice like Gatorade, as a performance enhancer

 

As I’ve come to think about it, since I learned how quotas fit in historically, I think it’s like this: you can push ceilings all you want, and show why things should change, and then you just have to break those ceilings with something like a quota. People in power don’t just give it up after thinking about it when you explain it to them, or so says Dr. King as I read him. This has got to be sort of like that, I think.

 

And I don’t think guys are resisting out of an unwillingness; it’s more a blind leather recliner chair and a beer kind of bias; we just get focused on the game we are playing the way we play it. This is a hard thing for most guys to get their heads around, at first. It’s hard to see that it’s a real problem and that just consciously thinking better thoughts, or having better attitudes sort of makes things change. In fact, the selection process is skewed in ways we are blind to and we well meaning white boys just don’t seem to see it. I probably don’t see them either; so if I were in their shoes I’d be thinking I’m going to do it right, as most of the guys choosing entrepreneurs did in those accelerators. They probably all thought they were unbiased modern men.

 

The results say we, I, have a bias that is leading to lower portfolio company performance in our selection criteria; a bias we can’t see. As a matter of fiduciary responsibility, we then just need to set in place a quota to make sure we are selecting the highest performing group whose value we, guys and the people on these selection committees, some women of whom are women, can’t clearly see. We need to do this through an artificially instituted changing of the selection criteria to do what the data says to do but that we don’t seem to be able to do on our own. This is a crutch to help guys achieve better portfolio performance, a guide for a blind man. Guys are built for comfort. Changing big rules like this is worse than going shopping with your wife or girlfriend.

 

Then we are looking to lateral relational value, with vendors, customers, employees and the community, which I write about on our site. for the areas where we think we will find that extra financial value.

http://socialcapitalmarkets.net/idea/gender-lens-investing/

 

I think a series of global Google hangouts, phased up to SOCAP13, along with maybe some physical meetings at our Hubs would accelerate this idea. The Hubs around the world could get involved, maybe. This is a seriously challenging idea to guys. The former head of the Santa Fe Institute contacted me to explain how unjust this was, how unfair, possibly illegal. I told him male privilege was not enshrined into law, just country club rules. That, I am told is my message in this mix; a guy can say that line while a woman can not. So I say that line, then talk about what the numbers say, then explain my action as I scope out the next fund I’m going to be involved in, and offer this quota as a possible piece of impact investing infrastructures to others doing early stage funds. Only use this tool if you want to beat the other boys is the way we might play it for them. Guys, using the quota is like taking a performance enhancing substance, like steroids. Except it’s not. Compare the financial performance of funds that used it against those that didn’t. Gender lens quotas: a tool for winners. Be the best fund manager you can be. Use a gender lens quota. Sell justice like Gatorade. It could spawn have its own line of deodorants and personal care items. Yes, I am wearing True Justice, the quota cologne, do you like it?

When you design the system correctly, justice is just a positive externality. I think our selection process is flawed, too, in what we look at from the standpoint of company performance; seeing the enterprise as an island rather than situated in a community. Looking at relational value, as the SOCAPOpen entry suggests, is an attempt to design something new into the criteria; new places to check under the hood, new methods to refine the site on your hunting rifle, a new way to sharpen your warrior blade. We will be looking for the bonus in places most funders don’t look, in feedback loops that create financial value through trusted, mutually value creating relationships. And I think that approach will outperform what the existing research shows. I think we will be above baseline, that this approach will outperform its peers.

The data says this is the path to higher performing fund portfolios. There are, of course, other reasons to do this. But it’s interesting you can argue from that perspective. I am not suggesting that higher financial performance is my reason for doing this. But when I saw the data I saw this as a lever to change some things. I’m not sure if it’s moral strength as a quota is weakened or strengthened by the fact that it is eminently practical and should lead to investors making more money; enriching the already rich, unless we change the dynamics around that in this fund.