Thursday, December 23, 2010
Our Institutions of Education are Anti-Education
A very good friend of mine who is also a philosophy professor pointed me to this article about rampant plagiarism in the academic world, written by an "academic mercenary" whose clients pay him to write everything from business school proposals to doctoral dissertations.
It's a chilling read, because it articulates so clearly the massive failure of our institutions of education, as a whole, to actually educate. Not only do they fail to educate; the educational institutions to whom we entrust so much are, in many ways, anti-education.
A few days ago, I posted a note about this problem on my personal blog and received a comment from the ever-insightful Carol Sanford that really hits the nail on the head:
"Education, from the Latin root ed-u-caré,means to draw out; and the current model of education is missing the point of its own etymology... Modern schools do not 'draw out', but rather 'push in' facts and knowledge."
The current model of education is missing the point of its own etymology. I love this phrase. It's so deliciously ironic, and it would be funny if it weren't so piercingly true. In the United States, we treat schools as fact-pushing factories, filled with the bland curriculum of standardized tests, devoid of creativity and critical thinking. And like a factory, the best students aren't the most creative or even the smartest; they're the ones who can best tailor their work to fit within a certain set of specs. Those who question the system are ignored or ostracized, while those who struggle are utterly left behind.
Case in point: my professor friend, who teaches at a small liberal arts college, has a transfer student from a large, prestigious public university. This student is struggling in class and was afraid to approach my friend for help. The reason, he later learned, is because at the large, highly-respected university the student came from, undergraduate students were discouraged from engaging with their professors!
Our institutions of education are not only failing to adequately educate the vast majority of their students. If education is the Socratic process of drawing knowledge out through creative inquiry and critical thinking, these institutions are actively undermining their students' ability to be educated at all.
The Lumiar Institute in Brazil has a more humane view of education. For their students, education is about inquiry and interaction, engaging with the world rather than retreating from it to memorize facts in a book. They treat education as a lifelong process that occurs both formally and informally. The Lumiar Institute is still an educational institution, but here's a key difference: this institution is expressly designed to encourage human flourishing, to facilite creative education, rather than undermine it.
Pratham is another organization that's doing great things for education. Pratham is more about communities than instutitions. Their programs utilize community spaces - homes, temples, parks - to provide a place for underprivileged children to come together and learn. They find and train instructors from those same communities, supply materials and generally try to enable success. Pratham recognizes the interdependence of communities and educational institutions and seeks to build vibrant communities that allow students to thrive within these institutions.
I encourage you to visit the websites of these organizations, read about their educational philosophies, their students, their values. They're examples of humane education, so very different from the commoditized, factory schools we have in the United States, where education seems to be more about producing workers than enlightening minds.
We desperately need that humanity here. Organizations like Pratham, the Lumiar Institute, and also the Harlem Children's Zone tell me it's possible. With few resources and seemingly terrible circumstances, they're making a difference. Yet how many students are languishing in the middle-class suburbs of America, to say nothing of the small towns and inner cities? How much potential are we wasting, will we yet waste from our inaction?
Robin Cangie writes about 21st-century issues at robinoula.com. She tweets as @robinoula.
Sunday, December 19, 2010
A Cause for Genuine Delight
It's the mass consumption, er, holiday season again, which means that everywhere I turn, I'm bombarded with advertisements trying to sell me delight - men delighted by power tools, women delighted by diamonds, children's faces filled with the unbridled joy that can only be caused by [insert marketed product here].
A few weeks ago, I wrote about how society is manufacturing contempt via the commoditization of our stuff, our news and our communities. In this same vein, we're manufacturing and commoditizing delight, too. I'd argue that the manufacture of delight is really just the other side of the contempt coin. When we package delight into a commodity to be bought, marketed and sold, we degrade the dignity and authenticity of this really wonderful human emotion. This is a form of contempt, especially when we attach it to cheap, mass-produced products that are made with little regard for the health of humanity or the planet. And at no other time of year is the manufacture and commoditization of delight more apparent than it is right now.
Despite what marketers tell us, manufactured delight is a ruse, at best a poor substitute for genuine delight (the kind we don't need marketers to help us feel), and at worst another engine for manufacturing contempt. This kind of delight is:
- Shallow. Manufactured delight doesn't tap into anything bigger than itself, (unless you want to count company profits). It creates nothing of meaningful value, has no positive long-term impact, and feeds into our culture of consumerism and commoditization.
- Commoditized. Manufactured delight is the kind of delight you feel when you acquire something new. It revolves around buying and/or giving things, not building relationships. Like a fast food hamburger, this kind of delight is easy to give and easy to acquire, but it fades quickly and makes no contribution to your long-term health and happiness. If anything, it leaves you hungry for another fix.
- Unsustainable. Remember how you felt as a kid after you'd opened all your Christmas presents? Probably not as delighted as you did while you were unwrapping them. Manufactured delight fades almost immediately, leaving you with a gnawing sense of emptiness that can only be filled by acquiring more stuff. That in itself is unsustainable, but when that stuff is manufactured without regard for humans or the environment, you have a recipe for great harm.
This sad excuse for delight is what most companies are manufacturing. It's boring, fleeting and feeds into the contempt/commodity cycle that treats everything, right down to our precious human emotions, as a product to be bought and sold. But business doesn't have to work that way. Market dogma aside, our business models are not set in stone, nor do they operate according to an invisible set of immutable laws.
A company called Socks for Happy People has found a way to thrive that does not involve commoditizing and exploiting our emotions. They make sustainably sourced, genuinely delightful socks that are designed to "amaze, uplift and inspire". Quite wonderful on its own, but to see what really sets them apart, you have to read their mission statement:
"Socks for Happy People exists to inspire a deeper understanding of genuine happiness throughout the world, and be a shining example of how a business with the well-being of humanity and nature at its core can be inherently sustainable and abundantly profitable."
This is a company that makes socks for a living, and socks aren't even mentioned in their mission statement.
It's hard to imagine something more commoditized and ordinary than socks. There are hundreds, if not thousands, of sock manufacturers out there. Here's the difference between all of them and Socks for Happy People - making socks isn't their mission. Making socks is what enables them to accomplish their mission.
Socks for Happy People has transformed their socks into a platform for spreading genuine happiness, joy, love and yes, delight. And they inspire those feelings in us whether or not we buy their socks. If we do become a customer, the act of purchasing is about more than just giving them our money; it becomes a way to participate in their awesome mission, to experience ourselves as part of something bigger than ourselves (and I haven't even mentioned their Buy One Give One Free initiative to provide socks to street children in Mongolia). That is how profits and delight, not to mention all our other wonderfully human emotions, can co-exist to create enduring, meaningful value in the 21st century.
If Socks for Happy People can do it with socks, we can do it with just about anything. Who else is causing this kind of positive disruption? I'd love to hear your examples in the comments.
Robin Cangie is a writer, thinker and digital geek who loves to wonder about things. She writes on her blog about 21st-century business, sustainability and whatever is on her mind. She tweets as @robinoula.
Thursday, December 16, 2010
The Art of Significance
"Mr. Li, the overseer of the Chinese renewable energy industry, publicly exhorted the leaders of the nation’s biggest wind turbine makers at the China Wind Power conference, a three-day event that drew hundreds of executives from around the world.
“You cannot be called a winner if you are the leader for three or five years,” Mr. Li told the Chinese executives. “You can only stand on the top line if you are the leader for 100 or 200 years.”
The Chinese presidents sat quietly and respectfully, chins down. Senior executives from the foreign manufacturers — including Vestas, G.E. and Gamesa — sat alongside them, staring straight ahead in stony silence."
Link. Ask yourself: can you imagine similar words being said in any corporate boardroom, policy wonk powwow, Senate committee meeting, or trading floor in America?
It's difficult--if not downright impossible--to. Because far from seeking superiority for, well, the next century, American institutions are myopic, opportunistic, rigid, sclerotic. They barely seek superiority for the next nanosecond--in those rare, ragged instances that they have the courage, wisdom, or perseverance to seek meaningful superiority at all. They're geared to create thin value--not thick value.
What Li's demanding from Chinese C-suites is, above all, significance. He's redefining success, kicking the bar not just into the stratosphere--but into the next galaxy. America's still pursuing yesterday's tired old notion of near-term competitive advantage. But competitive superiority in the 21st century is a function of mattering radically more--focusing with a lethal intensity on achievements so significant, for example, that they endure a century or more.
That's the art of significance--and my guess is that most boardrooms, obsessively, delusionally, pathologically fixated on the near-term bottom line, just don't (and won't) get it. Until, that is, all of a sudden--next to an institution working furiously on stuff so significant it matters, endures, and perseveres for a century or two--they just don't matter anymore.
Tuesday, December 14, 2010
The Great Stagnation and the Ventureconomy
To follow on from recent post about a failing global economic report card--a nice demonstration of yet another broken capital market.
Click the chart to biggie size it--and note the peak's in '96, well before the peak of the dot com bubble in terms of equity market indices. What does that suggest?
Perhaps that the real bubble was in venture finance--and that it's been bursting for quite a while. And, more deeply, that capital markets today are more systemically, chronically broken than is often suspected: they're shuffling the same old assets around, extracting the last meagre bits of value from yesterday--instead of investing in tomorrow.
Sunday, December 12, 2010
A (Failing) Global Economic Report Card
What do you see when you look at the global economy? In fact, if I asked you to make a report card for the global economy, how do you think it would score?
You might suppose, as most do, that we're in the final stages of a big, scary--but ultimately transient--financial crisis. Here's what I'd suggest. We're not. We're smack in the middle of a bigger, broader, more enduring global economic failure--and, ultimately, in the incipient stages of a great reconfiguration and reinvention.
I'd like to suggest that we're witnessing a global economy that's failing both functionally and structurally. More precisely, it's failing functionally because it is structurally weak; it is structurally brittle and shaky because 21st century institutions aren't fit for 21st century prosperity.
Here's how I propose to make the case to you. Next time, I'll examine how the global economy's doing structurally. But first, let's examine how it's doing functionally--by informally grading the global economy's most vital markets, and creating the report card I discussed above.
Capital markets. Let's start with the easiest one first. Needless to say, capital markets are, without a shadow of a doubt, deeply dysfunctional. Not only have they failed completely over the last decade to allocate resources to uses of enduring productivity, they're on life support to the tune of hundreds of billions in direct and indirect subsidies by central banks. Without that life support, the explicit argument is that the capital markets would stutter and fail.
That's the developed world. Now consider the rest of the world, for a moment. In the world's most signifiant emerging economy, China, the bulk of decisions about allocation and utilization aren't made by capital markets to begin with--they're made by technocrats, with a deep distrust of markets. To be precise, about 70% of investment in China is directed by the state. Grade? F.
Labour markets. In America, an unemployment crisis of historic proportions is tearing jaggedly through the economy. Not only is the unemployment rate at an alarming high--the labor market's failing almost completely, with people being unemployed for years on end, median unemployment duration spiking, the young being disproportionately unemployed, and those being unemployed longest in the least demand, because little training or support is available to them. Conversely, it's not just the quantity of jobs that's the problem--America's been facing a systemic underemployment crisis for at least a decade, because the labour market excels primarily at creating McJobs. Obversely, in China, consider a very interesting article about the flipside of the coin: highly-educated grads facing massive underemployment--because, like America, China can't create enough high-quality jobs to employ people productively. Conclusion? Globally, labour markets are failing: given the current structure of the global economy, they've hit a wall (hence, underemployment). What they can't seem to do is to fully employ people, to induce them to work on stuff that makes the most of their capacities--let alone betters them. Grade? F. Product and service markets. Product and service markets are an abstraction--in the real world, they're the aggregation of the interaction between consumers and producers. The simplest--and most simplistic--way to think about working product markets is in terms of sheer quantity. Here, certainly, the American consumer has benefited: hit the big-box store, and buy the mega-pack. But it's been at the cost of individual and collective investments, employment, trust, and competitiveness--not to mention what Gabaix and Laibson have termed "shrouded attributes" (think: the hidden costs you've come to know and really, really, dislike). In other words, I'd suggest that product markets are fuelling malinvestment--not enduring investment.
Here's a more nuanced way to think about working product markets. Are fundamentally novel products, the result of new industries, making it to market? That's a tougher, truer test of long-run productivity gains, product markets allocating resources well. Unfortunately, no. Over the last decade, most of the new industries with the most promise haven't delivered on it--from nanotech, to biotech, to search (which stopped, for example, at web search--but still hasn't slashed search costs in finance, healthcare, etc). Hence, emerging markets are "emerging" not by spearheading novel industries--but by replacing the global factory (or call-center) floor; and by climbing the same ladder of consumption developed countries did. That's fine--but it tells us that product markets are barely working, stuttering along at minimum productivity and efficiency. Grade? D.
Resource markets. Resource markets can be thought of as markets for inputs that producers use. Today, those markets have several major problems. First, in commodities markets, speculation is creating volatility that offsets the gains to hedging that are supposed to be the raison d'etre of said markets in the first place: market efficiency is, to say the least, questionable. Second, of course, is the externalities problem. Though your favorite TV pundit might try to argue otherwise, the economic point is inescapable: global factor markets cannot be said to working in any meaningful sense when trivially obvious negative externalities are systemically and institutionally ignored (carbon emissions, biodiversity loss, distrust, etc). Hence, they consistently misallocate resources, squandering them--witness the erosion of stocks in fisheries, forests, [insert natural capital here], or in trust itself. Put them together, and the result is that resource markets don't induce the globe's producers to invest in resources, to power future productivity--they merely induce massive misallocation and malinvestment, producer choices that overconsume and underinvest in resources to begin with. Grade? F.
Here's what I'd suggest. If you believe that we're in the final stages of a big, but ultimately humdrum financial crash, you'd probably give the economy about a C+--like a student who hasn't failed, but hasn't exactly succeeded, either.
But here's what the failing grades above suggest: just maybe, today's profound economic problems are the bitter, dark fruit of more deeply rooted, more broadly spread, and more tangled, tightly interconnected set of roots. That this great crisis isn't just a banking crisis, or a financial crisis, but an institutional crisis.
Here's what I'm beginning to suspect. The global economy's challenges are structural, hardwired, systemic--not transient, fleeting, and isolated. The disease in the DNA--not in the organs. This is no mere crisis--and the fact that it's still being thought of, and treated, as one? Well, that might just be half the problem.
Saturday, December 11, 2010
The Power of Value Cycles
Let's get serious about radical innovation. Not just any tired old flavour thereof--adding yet another clanging bell or shrieking whistle, adding a trinket to a gewgaw to a gizmo, slightly changing the color palette of your latest, greatest snoozer of a mass-made "product--but higher-order innovation. In my new book, The New Capitalist Manifesto
, I discuss why institutional innovation is today's great challenge (and opportunity). And I make the case that one of the new institutions that underpins 21st century advantage is a value cycle
So here's a great example
of a nascent value cycle being born--and just what the power of value cycles might be--from Sweden.
"...KRISTIANSTAD, Sweden — When this city vowed a decade ago to wean itself from fossil fuels, it was a lofty aspiration, like zero deaths from traffic accidents or the elimination of childhood obesity.
But Kristianstad has already crossed a crucial threshold: the city and surrounding county, with a population of 80,000, essentially use no oil, natural gas or coal to heat homes and businesses, even during the long frigid winters. It is a complete reversal from 20 years ago, when all of their heat came from fossil fuels.
But this area in southern Sweden, best known as the home of Absolut vodka, has not generally substituted solar panels or wind turbines for the traditional fuels it has forsaken. Instead, as befits a region that is an epicenter of farming and food processing, it generates energy from a motley assortment of ingredients like potato peels, manure, used cooking oil, stale cookies and pig intestines.
A hulking 10-year-old plant on the outskirts of Kristianstad uses a biological process to transform the detritus into biogas, a form of methane. That gas is burned to create heat and electricity, or is refined as a fuel for cars.
Once the city fathers got into the habit of harnessing power locally, they saw fuel everywhere: Kristianstad also burns gas emanating from an old landfill and sewage ponds, as well as wood waste from flooring factories and tree prunings.
Kristianstad has gone further, harnessing biogas for an across-the-board regional energy makeover that has halved its fossil fuel use and reduced the city’s carbon dioxide emissions by one-quarter in the last decade.
“It’s a much more secure energy supply — we didn’t want to buy oil anymore from the Middle East or Norway,” said Lennart Erfors, the engineer who is overseeing the transition in this colorful city of 18th-century row houses. “And it has created jobs in the energy sector.”
The economics should be clear: more (economically) sustainable, less volatile energy--cheaper (once fixed costs are offset). The story's not about the pure technology of a biogas plant--the story is, more deeply, about institutionalizing a cycle, buying, collecting, reusing waste; creating a new market where there wasn't one before. Hence, the article notes:
"So far in the United States, such projects have been limited by high initial costs, scant government financing and the lack of a business model. There is no supply network for moving manure to a centralized plant and no outlet to sell the biogas generated."
It's institutions that are the foundations of 21st century advantage. Sweden's just one of a growing number of pioneers--companies, economies, entire countries--building value cycles, and learning to shift to next-generation economics. Lesson? If you want to be disruptive, get constructive. The question is: are you?
Thursday, December 09, 2010
Radical Creativity: Where Big Business Meets the Greater Good
The interests of big business are not necessarily at odds with those of the greater good. We tend to think they are. Advocates on both sides often act as though they are. But if we are to make any progress against the many great social injustices plaguing this world, we need to think about things differently. We need to understand that big business is not the enemy but rather one of the most important keys to a more humane and sustainable 21st century.
This argument isn't new, but it's often quickly dismissed for the (seeming, I'll argue) impracticality and sheer magnitude of the execution. Seriously, say the doubters, how can we get big business to focus on anything but profits? How can we penetrate through layers and layers of corporate and governmental corruption to actually do some good? And how can we possible align interests and resources across nations, corporations, non-profits, charities and everyone else under the sun?
You know what? Maybe we can't. And I don't think that matters as much as we think it does. The trouble with these questions is that they distract us from actually doing anything. They're so big and so daunting that they overwhelm us into inaction and automatically shut down our creativity, making it very easy for us to shrug our shoulders and feel helpless. They also treat these problems as purely institutional, which also breeds a sense of individual helplessness. So here's what I propose: What if we stopped focusing so much on seemingly insurmountable problems and started looking for opportunities instead? What if we just got radically creative with what's in front of us.
Here's where big business comes in, and I do mean big business specifically, because of one thing: infrastructure. Large, multi-national corporations have built well-developed distribution channels to transport their products all over the world. Think about the ubiquity of Coca Cola. From sub-Saharan Africa to southeast Asia, northern Canada to southern Chile, you can buy a Coke almost anywhere. Imagine a group of nations or charities trying to accomplish a network of that size and efficiency! And now imagine how many big businesses already have.
Can you see the potential here? The infrastructure is there. It's not perfect, but it's there. If we can get Coca Cola to the poorest, most desperate places on earth, why can't we leverage those same (already built!) distribution channels for medicine, textbooks, clean water filters, you name it? We could conceivably construct a world where access to Coke means access to a better life.
Enter a scrappy nonprofit called ColaLife. Years ago, while traveling through an isolated area of Zambia where 1 in 5 children dies before the age of 5, ColaLife founder Simon Berry was struck by the wide availability of Coca Cola and saw an opportunity. The AidPod, a wedge-shaped container that fits between bottles in a crate and can carry medicine, condoms, oral rehydration tablets and other live-saving treatments, is now being prototyped. Berry is working with Coca Cola and stakeholders in Zambia on a pilot plan to being distributing the first AidPods, mother's kits to help prevent child dehydration. They are using Coca Cola's distribution network, but this is all happening at no cost to Coca Cola itself.
You can read more about the pilot plan here. It's inspiring how Berry has managed to collaborate with one of the world's largest companies, local distributors, government officials and other stakeholders in Zambia and a huge network of volunteers to impact real change. And he did it, not by trying to change broken institutions but by leveraging systems that were already in place in a radically new way. That is radical creativity - taking honest stock of the situation and looking for opportunities where others see roadblocks, or nothing at all.
Radical creativity is the intersection of big business and the greater good. Institutionalized approaches are troublesome and complicated. On the other hand, if you see the world through radically creative eyes, you can start doing something right now, without worrying about how to address all the institutional problems. That's not to say that fixing those problems isn't important, but you might have to wait a long time for them to change. In the meantime, there's work to be done.
ColaLife is just one example of radical creativity. Have you heard of Interface, the global leader in sustainable carpet manufacturing? How about Vestergaard Frandsen, creators of LifeStraw and a host of other life-saving products? Their business model of profiting from global carbon credit markets is arguably imperfect, but on the other hand, ColaLife found a silver lining in the distribution of what is essentially caramel-colored sugar-water.
Imperfection is kind of the point. If we wait until we find the perfect solution to all the world's problems, we'll never accomplish anything. What makes ColaLife and Vestergaard Frandsen so radically creative - and effective! - is that they didn't wait. They saw an opportunity and pursued it, imperfections and all.
What are your examples of radical creativity? I'd love to hear about them in the comments.
Robin Cangie is a writer, thinker and digital geek who likes to wonder about things. She writes about 21st century business, sustainability and whatever is on her mind on her blog, robinoula.com. She tweets as @robinoula.
Sunday, December 05, 2010
Macro Perspective: Life and Debt in The Great Stagnation
There's much ado about debt: lots of hype (and spin) about debt crises. So let's do a quick examination of the actual numbers, dynamic, and trends.
The first thing that's apparent from the chart is who's the best off, from the immediate perspective of long-run debt. Canada's been actively deleveraging for a decade--maintaining the often breathlessly discussed fiscal and financial discipline. Canadian households are leveraging up, but not to a degree that might cause alarm. Superficially, the picture of a relatively healthy economy. Next up is Germany, whose much vaunted fiscal and financial rectitude is on clear display. Debt flatlines across households, governments, and the private sector. Yes, you can argue that Germany's rectitude is the zero-sum benefit of export-led growth that effectively beggars it's neighbors, pushing them into deficit--at least to some extent.
What's more interesting is the sharp spike in the blue lines. They're bailouts, effectively: the transfer of liabilities from the balance sheets of banks to the balance sheets of governments.
Here's what I'd note: that for countries like the US, Ireland, and Japan, government debt begins to substitute for private sector and household debt. Deleveraging is beginning to take hold, in other words, as one kind of debt substitutes for another. The blue line spikes, but the red and green lines decline or flatline. Here, debt has hit a limit, reflecting either stagnation (the US), penury (Ireland), or deflation (Japan).
But in countries like the UK, France, and Spain, government debt spikes, while private sector and household debt continue to grow: there's no substitution effect. From a macro perspective, deleveraging has yet to ignite. Here, bailouts are subsidizing the accumulation of further debt. This is a sharp warning signal that moral hazard is winning the day.
So while there's a great deal of hullabaloo about debt and deficit, here's my suggestion. A quick glance at the dynamics reveals that the great crisis is far from over--and, more problematically, that today's immediate focus on the PIIGS' liquidity issues is to fundamentally overlook the deeper dynamics of debt accumulation and substitution. For many countries, the real crisis hasn't even begun.
There's no recovery because it's not a recession. It's a great institutional transformation. The immediate debt crisis represents structural capital misallocation, decades of malinvestment, toxic consumer preferences, hyperbolic social discount rates, intergenerational wealth transfer, negative marginal real wealth creation, negative sum payoffs for the majority of citizens in developed economies, secular overconsumption and underinvestment, real asset insolvency, and, of course, locked-in political capture.
The destination is a global capitalism that can do better than all the above. But the journey's only just begun.
Friday, December 03, 2010
Groupon's Missed Opportunity
The tech industry has a total crush on Groupon, that darling of the start-up scene that emails you huge discounts on everything from Gap jeans to gym memberships. Now that Google wants to acquire the Chicago-based start-up for billions of dollars (update: Groupon has reportedly turned down Google's offer), it’s like the tech blogs are all competing to see who can gush the most about how great Groupon is and how smart Google is for wanting to acquire them. It’s really not that big of a deal – how many times have we seen this kind of story before?
Though I don’t find the acquisition news all that interesting, I’m fascinated by the concept of Groupon, mainly for the incredible opportunity they missed. On the surface, Groupon seems to be about killer deals. They negotiate huge discounts with national and local businesses in exchange for the promise of thousands of new customers – pay $25 and get $50 worth of Thai food, for example, or pay $60 for a normally $250 dental exam. It’s a classic loss-leader tactic – gain new customers at a loss in hopes that they return and generate more business later.
When you take a closer look at Groupon’s phenomenal success, though, there’s a lot more going on than just bargains. Groupon was one of the first companies to successfully harness the power of group behavior across the social web in the name of a common purpose. That’s incredibly powerful! Think of the potential – for the first time in history, the physical barriers to collective, powerful action have been torn down, and Groupon figured out how to focus that power into a single, common goal. That’s huge!
Unfortunately, Groupon never sought a higher purpose for the power it unlocked. Instead, it predictably capitalized on this newfound way to part consumers with their money en masse. Even the much-lauded value it creates for small businesses is rather mixed. Small businesses don’t profit much from Groupon sales, and they can wind up losing money if they don’t play the math exactly right (here’s an interesting article on Groupon’s double-edged sword). Not necessarily bad or evil, but hardly an engine for meaningful, long-term value creation.
I’m not trying to hate on Groupon. Like most companies, they’re just pushing commodities to make a profit, quite cleverly so. And that’s the missed opportunity. Groupon chose to be clever, when they could have done something truly remarkable with the power they unleashed. It’s not evil. It’s just boring and predictable, and utterly typical of the commoditized society in which we live.
Compare Groupon with a company like Kickstarter. Kickstarter is an online funding platform that also enables collective, powerful action on the web, but they do it for a much more meaningful purpose. Anyone with an awesome idea and a dream can post it on Kickstarter and ask for funding from ordinary people who believe in making a difference. Anyone can pledge to any project. If the project reaches its goal, you get the money, minus Kickstarter’s 5% fee. If you miss your goal, you don’t lose anything. Even your donors get refunded. It’s simple, elegant and incredibly powerful.
Kickstarter has made possible independent films, music albums, the social network Diaspora, a book on punk mathematics and the dreams of countless other artists and entrepreneurs. In short, Kickstarter has democratized start-up funding. They may not compete with multi-million-dollar investment firms (yet), but they – because they’ve harnessed the power of online group behavior for good as well as for profit – can give a promising idea just the start it needs to blossom.
Kickstarter is the kind of company that can flourish and make the world a better place. That’s way more valuable, more empowering and more meaningful than 70% off laser hair removal. It’s the difference betweenmeh and awesome.I don’t know about you, but I want to see a lot more awesome.
Robin Cangie is a writer, thinker and digital geek who likes to wonder about things. She writes about 21st century business, sustainability and whatever is on her mind on her blog, robinoula.com. She tweets as @robinoula.