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Scoping Out the Operating System for the Good Economy

Posted by on May 23rd, 2013

What part of the operating system for the good economy is already in software? What apps could be integrated for good effect, to build out the pieces of the systemic change we need in order to create a world in which my grandkids can thrive?

We’ve got a Frontier Market Scouts intern out of the Monterey Institute of International Studies who is looking at just that question. We hope to have some answers, and a map of the existing online operating system, as well as the gaps and tools needed for the Good Economy OS by the time we get to SOCAP13 in early September.

The map will be a guide to the online and mobile portion of a much larger project: the Biocultural Resilience Tool.

We’re going to explore using Farmerline as the messaging backbone for the Biocultural Resilience Tool. For Alloysius Attah – the Farmerline tech entrepreneur from a Ghanaian farming family – and his team, this experiment is an opportunity to enter new markets and potentially scale quickly. Read some of his take on the tool.

Farmerline is a mobile management and market advisory tool initially built by Attah and his team to help the mostly women Tilapia farmers know which markets have better prices. It also now gives them usable nuggets of information that help them reduce shrinkage: fish dying or losing weight as they are carried live, in vats, to market in the way aquaculture farmers do all over the world.

From their website: “Our motivation is to contribute to system wide change in the agricultural sector across Africa where smallholder farmers are empowered through technology to adopt new and improved ways of farming in order to increase yield and profit.”

Alloysius and I are going to do a joint blogging series as we explore this partnership, documenting how it’s working for both of us. It’s a pretty interesting partnership: a young African tech entrepreneur providing the baseline technology, with an older space convener from the U.S. with a platform that could widen his opportunities. We will try to be sensitive and responsive to all the power and cultural dynamics as we work on the project together.

What Farmerline has going for it is that it helps people do their jobs, save money, and even make more money. So people like it. In building our Biocultural Resilience Tool – which will debut at SOCAP13 as part of our Oceans theme – we also want to measure impact, and create a due diligence tool for impact investors. But we think any reporting tools needs to emerge from a management tool that helps people do their jobs.

Here’s why: Most impact reporting tools are heavy with friction-filled surveys and such that are designed by funders to keep track of where their money goes and what it does. They are imposed from without and sometimes add little or no value to the entrepreneur, or even sometimes get enterprise off track in order to feed the data need of the funder, whether it’s an impact investor or a foundation.

Funders seldom pay their grantees or investees the extra cost of compiling and reporting on their impact. It’s often an additive cost, imposed from above, without additional value. So, the dirty secret is that few for-profit social enterprises do it very much. Too often, reporting to funders doesn’t help you do your job or accomplish your mission. They are just demands from the funder commonly exercising their interpretation of fiduciary responsibility to track preconceived expected results and accounting, and increasingly with a theory to prove. Donors have no real incentive with which to ask their investees to increase their costs for no real value. But reporting is still important.

So, in building the Biocultural Resilience Tool we have a desire to start the other way. We want to thrill the entrepreneur and satisfy the funder with valuable information that informs decision making. So, we are moving outward from a management tool that helps people do their jobs and helps the business make more money. Then, we want to find a way to add in the essential reporting, that does help an enterprise use metrics, as a guide to successfully make sure they are achieving their social and environmental objectives. We want to do all this while also baking in mission insurance to have an answer to what I call “the Ben and Jerry’s problem,”* looking at what happens to the mission when the visionary founders sell the business.

*(In the case of Ben and Jerry’s, selling meant selling out. Read more.)

What is this tool? Its goal is simple: to enable more indigenous people to hang onto their lands and also enhance their livelihoods; to make life better for people and planet in places of high biodiversity and cultural diversity. Those places have an increased significance elsewhere as our global climate changes; one reason is that they are our storehouse of all the other kinds of grains and vegetables we will need as climate changes around the world. The tool offers a way to demonstrate a business case for investors and entrepreneurs, showcasing how to profit while also building long-term value through taking care of people and planet. Along the way, social and environmental impact is monitored and communicated in ways that add value for entrepreneurs, the people and places they rely on, and the investors that join them.

How will it do that? It will enable planet-focused investors and funders to co-invest or add social investing to what they are already doing. Talking to one of our target customer groups – national park and UNESCO Biosphere Reserve managers – this simple sentence gets them deeply interested: “It’s a tool to help you enhance the livelihoods of people who live around your parks or reserves so that there will be less poaching.”

Working with Attah, we are looking for mobile reporting apps that could integrate with Farmerline, and we are introducing him to friends at companies like LaborVoices, a Hub Ventures, alum that recently got a contract to install their mobile app in 300 Wal-Mart suppliers in Bangalore, India to make sure workers can tell the world about the conditions in which they make our clothes.

Our Frontier Market Scout is also going to look at Indigenous Designs’ Fair Trace Tool and at the mobile poverty metrics tool (Progress out of Poverty Index) from the Grameen Foundation. With an entrepreneur-centric focus, one guiding design principle goal will be to make sure the tools are lightweight, not cumbersome, and can integrate well with the enterprise accomplishing its core mission. We want to help the enterprises achieve economic viability and create what Charly Kleissner calls holistic sustainability: a positive social and environmental impact, accounting for or at least tracking externalities and unintended consequences.

We will also be looking at previous efforts like the Social Entrepreneur API from Social Actions, which has done great foundational work, as well as at the Artha collaborative due diligence platform.

This is just the initial story of how Alloysius and our team will work together; we will be delivering progress reports, as well as hosting Google Hangouts, as we move along on this and all the other parts of the Biocultural Resilience Tool. I think it’s going to be really interesting.

ShareTable Connects Food and Community

Posted by on May 23rd, 2013

We’re happy to share an exciting new launch (coming to us from Anthony of SOCAP12), ShareTable.org.

ShareTable.org is a philanthropic platform created for this event, but if enough money is raised to feed 50,000 people, the organizers will expand the endeavor into an ongoing accelerator helping restaurants to benefit their communities.

On Friday May 31st, The San Francisco Museum of Modern Art will host an exhibit called “The Making of a Charitable Restaurant Movement,” in which some of the best local restaurants will team up to benefit the San Francisco and Marin Food Bank. The idea is to demonstrate a robust public interest in making food more meaningful by giving back.

More than forty of the city’s most respected restaurants will sell $50 gift certificates, of which $5 will fund meals for people in need; gift certificates will be available for purchase May 31 from 10am to 6pm at the museum and online.

For every dollar raised by this event, The Food Bank will be able to provide three meals for hungry people in the Bay Area—and the need has been rising in the last few years.

Congratulations to them and we hope to see you out there!

SOCAP13 Themes Preview!

Posted by on May 22nd, 2013

Everywhere we look, the breadth of opportunities to accelerate the good economy are undeniable – we see it on SOCAP Open and hear it in our conversations at the HUB. And while SOCAP celebrates richness in breadth, we also know the value in providing depth on both foundational themes and emerging areas of importance.

With that, the SOCAP team is excited to announce our 5 core themes for SOCAP13:

- Impact Investing
- Meaning
- Health
- Oceans
- Place-Based Innovation

In addition to our 5 core themes, we’ll offer focused exploration on the role of art and faith in ways that we’ve never done in the past. And inevitably, our themes will be threaded with trends and innovations in technology, media and design.

Stay tuned for in-depth information on this year’s themes; in the meantime, if you or someone you know are innovating in these core areas, please submit a session idea via SOCAP Open (June 17th deadline).

Join Kevin Jones at Impact Forum: Investing in Inclusion – Singapore, June 13 & 14

Posted by on May 22nd, 2013

The power of Big Ideas and Big Actions will converge on the 13th and 14th of June with SOCAP and Impact Forum partnering up for a power-packed discussion about what is the next stage of transformation for social capital markets in Asia and Africa.

We’ll present a panel of tried and true social entrepreneurs to speak about connecting ideas to create and deliver tangible positive impact in society and community. SOCAP Co-Founder, Kevin Jones, will moderate the panel and lead the discussion about how we can continue creating bridges that will connect ideas to action and intersections between money and meaning.

Learn more & Register today! Special SOCAP discounted price is available.

Q&A with Fish 2.0: Beyond Seafood Business as Usual

Posted by on May 20th, 2013

This article is one in a series of guest contributions by David Bank, co-founder of Impact IQ.

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Converting fish waste into food. Powering fish farms in the desert. Generating value from oceans of data.

I caught up with Monica Jain recently to learn what business opportunities are emerging from the Fish 2.0 contest she has organized to connect investors with opportunities in the $390 billion seafood industry. (See “Fish 2.0: Investing in Sustainable Oceans and Fisheries.”)

From a surprisingly strong field of entries, Fish 2.0 will present the best businesses to investors this fall. The 65 remaining companies have been paired with advisers to further develop their business plans and will be winnowed to 10 winners and 10 runners-up by November. The top winners will split $75,000, but more important is the prospect of loans and equity investments from the impact investors Jain is lining up to review the deals.

Jain is already identifying market niches in which small and medium-sized businesses are marrying sustainability strategies to business necessities. Jain shared her early insights with Impact IQ, which is developing special coverage of sustainable oceans and fisheries in partnership with SOCAP 13, the social capital markets conference in San Francisco in September.

David Bank, Impact IQ: What excites you most about the Fish 2.0 contest entries?

Monica Jain, Fish 2.0: The breadth and strength of the businesses. Many of the businesses entering the sustainable seafood sector have a history of operations and are cash flow positive.

Impact IQ: What do you mean by ‘sustainable seafood’?

Fish 2.0: For example, large amounts of fish are discarded during fish processing and packaging. Fish heads, bones, and meat – an estimated 40 percent of the fish is wasted during filleting or processing fish. We’re seeing new technologies that allow for collection, storage, conversion, and sales of these otherwise wasted protein sources into marketable products.

These waste clippings and meat remnants contain valuable and unique proteins and nutrients. The new end-products include aquaculture feeds, fish meals and fish oil, pet foods, and fertilizers for agriculture.

Impact IQ: Is that new? Aren’t companies already reducing discards?

Fish 2.0: Yes. Several large aquaculture companies use the excess fish clippings to produce fish feeds or oils for large-scale operations. Now, we are seeing new, smaller companies in other areas of the marketplace, offering collection services for smaller scale processors and sales to local farmers and producers.

Impact IQ: How big is this opportunity?

Fish 2.0: The aquaculture market is worth about $120 billion per year. That’s at the farm level, where producers grow 60 million tons of seafood,or about 41 percent of the world’s seafood. Global demand for protein is only growing. An additional 23 million tons of seafood per year will be needed worldwide by 2030. (Editor’s note: See Jain’s white paper, “Financing Aquaculture: Investment Opportunities in Farmed Seafood”)

Producers are looking for substitutes for the fish oil and fishmeal that they use in feeds. The harvests of smaller, forage fish (like sardines) that are traditionally used in feeds are projected to stay stable at best or to decline at worst.

Converting otherwise wasted fish drives industry profits by making sustainability a basic part of the business.

Impact IQ: What’s another emerging area of innovation?

Fish 2.0: Information technology solutions, like software, databases and brokerage companies that will help fishermen to shorten supply chains and to have more control over whom their catch is sold to and at what price.

Some of the Fish 2.0 competitors are developing systems to track the health of wild populations, verify the origin of seafood products, and help fishermen garner higher profits. That includes premium prices for the fish that they catch sustainably.

Impact IQ: How?

Fish 2.0: For example, with web-based auction systems and online sales contracting and distribution systems that connect fishermen directly with buyers.

Currently, most fishermen sell their catch to the one business that has offloading and storage privileges on the dock. In many cases, the fishermen do not even know up front how much they will earn from their catch or what price it will get in the market. They are only advised of the price they receive once the distributor has sold the catch and taken their own margin, usually several days after the seafood lands on the dock.

Fishermen work in this system because it is the only option in many cases and because of their need to offload their boats quickly, sell their fish, and get back to sea during open seasons and good weather

Impact IQ: Better data can help retailers, too?

Fish 2.0: Some of these technology solutions offer traceability and tagging to identify fish from a particular farm or boat and track it all the way through the supply chain.

Right now, the complexity of seafood supply chains also makes it difficult for retailers and restaurants to trace where their seafood comes from and ensure that no fraudulent identification of the seafood has occurred in the chain.

These innovations will allow discerning retailers and consumers to have confidence in the freshness, quality, species, and sustainability of the products they buy. It also creates potential for greater price premiums for seafood that meets these requirements. Better pricing and shorter supply chains mean that a larger proportion of the profits can be allocated directly to the fishermen and other stewards of ocean resources.

Impact IQ: What were some of the surprises?

Fish 2.0: One area that appears to be ripe for growth is in new aquaponic technologies that allow for small-scale farming of fish and vegetables together in the same system – literally, growing fish in vegetable gardens. This can be done in a backyard, on a rooftop, or at scale for a commercial enterprise.

Impact IQ: Is that just an eco-novelty, or a serious business opportunity?

Fish 2.0: Many areas of the world do not have access to fresh fish and have growing populations in need of protein — in deserts or other inland geographies that do not have strong supply chains for food distribution from coastal areas or which lack enough water supply for traditional agriculture. There are aquaculture technologies that allow for cultivation of fish in these areas, but they have largely required too much energy and water to be profitable.

These aquaponics systems reduce the amount of freshwater needed to produce fresh vegetables and also allow for fish to be co-cultivated alongside the produce. This local-level farming also lowers the distribution and transportation costs for fresh food.

Impact IQ: So local, organic fish is the new frontier of “eat local”?

Fish 2.0: The demand for local food products is growing in North America, Europe, and Japan. We are seeing new seafood businesses that are taking advantage of this interest in healthy, local and sustainable food, helping brand their product and sell directly to consumers.

For example, some of these efforts help fishermen tell personal stories around the seafood that interest and keep customers, while others focus on promoting fish as a healthy protein source.

Investing in both fish and agricultural businesses offers a way for investors interested in regional food systems to diversify their portfolios, and to have their investment allocations reflect all of the food on their plates.

Impact IQ: What’s next for Fish 2.0?

Fish 2.0: Our goal is to connect investors with viable businesses in sustainable seafood. We would love to have more folks involved in Fish 2.0 as the competition progresses.