The Effect of Social Missions On Tech Innovation 50
The New York Times is running a piece on how some emerging companies in the tech industry are focusing on social missions rather than profits despite having successful business methods. The startups are modeling themselves after organizations like Mozilla and TechSoup, who have both grown to significantly affect their respective markets. The article also discusses some of the non-profit support groups, such as the EFF, who contribute specific services to the field. Quoting:
"'There is a lot of discussion taking place right now about a whole new organization form around social enterprise,' said James Fruchterman, president of Benetech, a social enterprise incubator based in Palo Alto. 'Many of these efforts can make money; they will just never make enough to provide venture capital rates of return.' The new stream of technology-centric and successful nonprofits, however, appears to be driven in part by a set of microelectronics technology trends that have sent shock waves through many industries, from publishing to music and movies. 'Computer technology and the Internet are lowering the cost of doing business,' said John Lilly, the chief executive of Mozilla."
Re:The Visionary Geek (Score:4, Insightful)
The world has to have different types, asshole types included. Without them and the other groups, the would does not and will never work. You need forward thinkers and you need short sighted thinkers. Without short sighted thinkers, you go bankrupt in the short term and there is no long term and visa versa.
No one group or type of person can do it all.
Re:The Visionary Geek (Score:4, Insightful)
That's what the assholes want you to think.
You think Enron was the only company that fudged numbers so their top brass made their bonuses? This behavior doesn't create wealth, it only redirects it from productive uses. These people are parasites on wealth building processes. The system functions despite these people.
The essence of being an asshole is being a person who habitually lies to get ahead. Many highly successful people are assholes, but for ever such there are a thousand whose lies caught up with them. It isn't that assholes aren't forward thinkers, it's that they don't look any farther into the future than is necessary to keep their deceptions from collapsing. It's not about rational self interest, it's about the inability to control the impulse to grasp and manipulate.
This doesn't mean nice guys finish first. The world isn't divided into assholes and nice guys. Ben Franklin was a bit of a conceited jerk, but he was never an asshole, and he pretty much accomplished anything he ever set his hand to. He was incredibly disciplined; it was always a penny saved with old Ben. He know the line between jerk and asshole, and didn't step over. He wasn't the type to cheat a customer because a repeat customer, after all, is the most profitable in the long term. He might deceive his way into a lady's boudoir, but his aims in those matters were exclusively short term.
And sometimes assholes smarten up. Young George Washington was a nasty piece of work, but the transparent ugliness of his social climbing ruined any prospects he had of advancement, and this changed his thinking.
Thomas Jefferson never stopped being an asshole, and suffered his entire life as a result. No question he was very bright, of course, but what he accomplished was because of his intelligence and despite his unwillingness to face his personal problems squarely.
The world needs many kinds of people: kindly people and stern people, benevolent people and ambitious ones. But saying it needs assholes is just another way of saying that it needs more fools. Saying that many assholes are successful is like saying that many people successfully pursue the lottery to riches. It's only "many" if you don't compare it to the failures.
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I'm constantly called an asshole because I tell people what I actually think (I won't lie to make someone feel good) and where to go.
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I hit submit instead of preview. Crap...
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Oh, that's just being blunt. It may also be being a bit socially awkward.
You're not an asshole if you tell your female coworker she looks fat in that dress. You're just a jerk. You're an asshole if you tell her if she helps you on this project you'll share the benefits, then renege.
In any case, people don't have a right to what is in your head. So when she asks you before a meeting whether she looks OK in that dress, you don't have to say, "It makes you look really fat." You can say "You look as lov
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anyone?
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No, the m in meek is just a mistranslation from Ancient Mre^H^H^HGreek.
See? It's an easy mistake to make.
The Visionary Geek is ......Muhammad Yunus (Score:1)
Finally... (Score:3, Interesting)
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Re:Finally... (Score:5, Informative)
Not necessarily. Corporations must focus on providing value to shareholders. For most (i.e. almost all) companies, that means profit, though any and all legal means. But it really depends on what the articles of incorporation say.
Whenever you create a corporation, you file a legal document called the articles of incorporation that set up all of the rules about how your company works and what its goals are. The boilerplate articles that most companies use say that the company's goal is, basically, profit. When shareholders buy into such a profit-seeking company, they have a legally-enforceable expectation that the board and officers will focus their efforts on making money.
Some companies, however, write different articles. There are a number of companies in the last few years who have written environmental responsibility into their articles, and prioritized it above profit. So for those companies, shareholders expect profit to take a back seat to environmental concerns. The officers of such a company would be breaking the law if they were to, say, use cheap, non-sustainable technology to build their products in order to increase profits.
The problem, if there is one, isn't that corporate executives MUST seek profits, it's that shareholders prefer to buy into corporations that are structured to seek profits.
Re:Finally... (Score:4, Interesting)
and that the majority of the money that comes from shareholders to buy shares is not from people, but corporations whose charter includes only profit aims.
Such as banks.
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and that the majority of the money that comes from shareholders to buy shares is not from people, but corporations whose charter includes only profit aims.
Such as banks.
Sure there is a lot of corporate ownership by corporations, in a big incestuous pile, but the ultimate source of capital is from individual investors -- primarily retirement investments. If individual investors chose social good companies over pure-profit companies, and chose to invest in banks and mutual funds that chose social good, then the market would follow suit.
When it comes to their retirement, though, most individuals prefer to maximize profit.
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Re:Finally... (Score:5, Informative)
I remember a press release somewhere about a non-profit pharmaceutical company created specially because of the issues you refer to. Ah here it is... http://www.oneworldhealth.org/ [oneworldhealth.org]
Anyways, some type of issues that the world deals with doesn't fit well with the corporate business model. Just because a profit cannot be made, doesn't mean it shouldn't be done.
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Growth, cash flow and profits are all things that you trade off, at least in the short term. Growth is easy to achieve; you just shovel cash into getting new business. I've known businesses that lost money (profit) for years because they did this; they paid last year's debt out of thi
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ideally (Score:2, Insightful)
Hmmm.... (Score:3, Interesting)
Yes, there are exceptions when it's a *really* small business, but we're talking about company sizes that include paying an accountant and have many talented employees.
It's a marketing angle to create some differentiation. Whole Foods Markets is a very well-known example. Guess what? Investors were mad as hell when their profits did not come in as targeted.
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Not all, or even most companies would work as non-profit. It's also not a bad thing to try and build wealth.
The Canonical Example (Score:4, Informative)
I wonder if he's theorizing or just making a veiled reference, because it seems to me that there's a very good chance that the next major operating systems company is Canonical Ltd., producer of the Ubuntu Linux distribution. While Canonical is technically a for-profit company, it is not a profit-motivated company. Mark Shuttleworth has said from the beginning that he was willing to continue funding the company in order to make sure that it met its social goals -- distributing a high-quality, user-friendly operating system completely free of charge.
With low costs from its decentralized "virtual company" model, and moderate revenues, I believe Canonical has achieved profitability even sooner than Shuttleworth expected. But profit is and has been a side benefit, something that makes running the company easier rather than a primary goal.
I'm surprised the article didn't mention Canonical by name.
"for a small administrative fee" (Score:2, Insightful)
The main goal of every company is to make as much profit as possible. You can't survive without this goal.
The article is mainly about companies that try to do business with non-profit organizations. I don't see how this can be labeled "social enterprises". Integrating some "social" goals in your business' mission statement is nice and pretty common, but it doesn't change the fact that your main goal should be making profit.
The article doesn't seem to state anything that would convince me otherwise. Noth
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The main goal of every company is to make as much profit as possible. You can't survive without this goal.
The main goal of every company is to make as much profit as possible -- except for the companies that have other goals. They're rare, but they can and do exist, and many of them survive just fine.
Assuming you can find investors who want to invest in a company with a primary goal other than profit, it's often a competitive advantage, because you don't have to worry as much about how to generate the returns investors are looking for. So, you can operate on thinner margins and take bigger risks, confiden
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It's a competitive advantage because you don't have to wor
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It's a competitive advantage because you don't have to worry about your competition anymore (and vice-versa).
Not true. You still have competition, and you still have to worry about them. You still even have to worry about making money -- that it's a lower priority than some other things doesn't mean it can be ignored.
The primary goal of an investor is to get a ROI. If they aren't going to get this, they aren't considered investors anymore..they are people making donations, and they won't care what you do with the money..because they never expect to get any of it back.
Also not true. Some investors are willing to accept a lower rate of return than they could otherwise get in order to also feel good about the benefit (or lack of damage) their investment brings to the world. They still expect a return, and aren't going to invest without one, but they'll accept
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Again, the people that aren't interested in a profit (or low profits) are not going to invest their money, they will donate, which is different. (non-profits either get dontations from private entit
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Again, the people that aren't interested in a profit (or low profits) are not going to invest their money, they will donate, which is different. (non-profits either get dontations from private entities or grants from the government).
Explain, then, the people who invest in, for example, the sportswear companies that commit to sustainable manufacturing practices, even though they mean higher prices and lower profit margins?
You fail to consider that an investor can have MULTIPLE goals. I'm interested in making money, but I refuse to invest in companies that use Asian sweatshop labor, because although making money is important, human rights are MORE important.
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The #1 goal is still profit.
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And yet they'll sacrifice profit in favor of other ideals. So is profit really the #1 goal? Or are they just stupid?
Not all businesses are the same (Score:3, Insightful)
You see there are people out there where the job and the social mission are more important than earning as much money as possibl
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It can't get you everything, but it can give you freedom. With enough money in the bank, you never have to work as a corporate slave again.
"If I were working corporate (which I did at one point), I'd be getting paid probably twice what I'm getting now for less work. But I'd be under the thumb
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It can't get you everything, but it can give you freedom. With enough money in the bank, you never have to work as a corporate slave again.
Really? That question comes down to how much is enough. Working my corporate job was a means to an end, which was simply earning money. To me, that seems a poor life indeed. And how many IT people who you know earn enough money to throw off the shackles of their job early enough to not be a corporate slave? I'm guessing one or none. I certainly don't know anyone who has that kind of income. And exactly what kind of freedom do you speak? I have lots of freedom...the freedom to choose my job and
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Working for anyone (profit/non-profit) is considered corporate slavery to me. So, in your position, it's just slavery at a lower wage...which is ridiculous.
Most people don't have the discipline to not
Will fuels the engine (Score:3, Insightful)
but there is a fact as old as human civilization itself - WILL to do something is the biggest thing that can drive people.
these people, are setting up social companies, setting up social goals, because they believe in them and really want to achieve them, unlike some obscure company quarterly profit goals in a big buck corporation. and they achieve those goals, mainly due to sheer power of will that fuels their soul. in the end they end up more than achieving their social goals - they change society.
this is how this human civilization was made. anything that changed the nature of society on the face of this planet has come through such willing breakthrough.
wake up people. this is the way society is going. modern big buck corp understanding, which is just a bastardized heir of 19th century's samuel hezekiel hapgood & sons & co understanding is dying.
a new understanding and approach to solving things and making things happen has been brewing for the last 10 years, first it was in silicon valley and software business, and now its spreading around to other sectors.
jump in that bandwagon. start living in the next century instead of living in the last. make something change for good.
Divided Attention (Score:2)
I have nothing against enterprises that have social goals as their mission statements.
That said: I also like to invest in profit-making companies. It seems to me that when a company divides its attention between multiple mission statements, it never really succeeds at any one of them. Perhaps it would be better to structure the social enterprises as non-profits and let the for profit companies maximize their returns. Then I, as an investor, can allocate my resources between the two.
Sorry I'm cynical (Score:2)
Yep right up till they figure out how to ream you via bandwidth or some other required medium.