What To Do When Your Competitor Gets Funded? | Bothsides of the Table

What To Do When Your Competitor Gets Funded?


This morning Clutter.io announced they raised $9 million from Sequoia, arguably the best venture capital firm that exists. Congratulations. Sincerely.

Conventional wisdom says I shouldn’t tell you this because I invested in their main competitor, MakeSpace. I know my MakeSpace friends will forgive me because I just don’t believe the conventional wisdom is right. And it’s part of what can go wrong in startup land.

For starters – the co-founder of Clutter.io, Ari Mir, is a friend and 6 years ago I backed the first startup he co-founded with Ophir Tanz, GumGum. Ophir was and is the CEO and is running what is now a spectacularly successful business. Clutter is LA based and many of my friends invested. So why would I want to damage a bunch of friendships for no reason?

But the bigger truth is the competition is important. We will have two well-funded companies educating the market on why this market opportunity for the $24 billion US storage market is ripe for disruption. When we funded Sam, Rahul and team at MakeSpace > 2.5 years it was hard to get other investors to see this unsexy market as ripe for innovation. Fast forward to today, as you can imagine our phone was ringing off the hook with investors wanted to reengage in discussions. Why? Simple. They realize there is some market validation when there are competitors. Not market guarantees, but more like, “Ok, I heard your story 2 years ago, how has it gone?”

But more importantly this same phenomenon will happen market-by-market. More consumers and businesses will hear about our solutions and want to learn more. And our competitors are not really each other but the incumbent businesses that have 99.9% market share today and are stuck with high real-estate costs, shitty customer service, bad value propositions and no ability to respond to competition because they have effectively become real-estate holding companies that store stuff for cashflow.

I’ve seen this play out a million times and usually in self-destructive ways where unhealthy focus on your competitors leads one to take one’s eye off of the customer and market opportunity. Which is why 5 years ago I penned this still important piece on “Why You Should Make Your Competitors Your Frenemies.”

In summary:

The competitors are the incumbents Healthy competition keeps you on your toes Competition creates a market with choice and improves consumer awareness, investor awareness and journalist awareness No competitors means you have a relatively small idea that nobody cares to compete on. Competitors backed by great VCs means you’re likely on to something. What mistakes do people make?

Trying to copy every product release Launching artificially in markets to compete on perceived “land grabs” Bad mouthing the competition in public / focusing more on the competition than the customer What should you do when a competitor announces a big fund raise?

Stay focused on your business, your market and your customers Reassure your company that it’s healthy to have competitors (after all – all startups are naked in the mirror in the morning). Pretending the funding didn’t happen is dumb. Everybody reads the tech press Send a quick note to your investors that you read the news, you feel good about your market positioning and your product. If well capitalized (like we are at MakeSpace – remind investors of that) If for some reason you think your business ISN’T competitive then you need to address your shortcomings. But honestly you have have known that before the funding Don’t feel rushed into responding in any way (trying to quickly raise $, trying to do a ton of marketing, changing your product plans or geography plans) Reach out and get to know the other team. My guess is that over time you’ll have more in common (like working with big cos, working with regulators, dealing with inertia in the market) than you do have against that company Quickly get back to your day job Don’t get me wrong. I still believe in competition. I still believe in winning. I still believe in knowing how your product differentiates to things others in the market can buy in stead of your products. I believe in hustling, using natural advantages and measuring oneself relative to others doing what you do. But that doesn’t need to be unhealthy competition or obsessiveness on the wrong goals.

So rather than selling you on all of the positive attributes of MakeSpace (which I will do from time-to-time because I’m a passionate believer that we’ve figured out the right formula to a billion+ dollar eventual exit and I am as obsessed with MakeSpace’s business such that I talk to the team minimum once / week) – today is a different day. It’s Clutter’s day.

It’s the day to acknowledge the hard work and achievements of Team Clutter. And wish you the very best successes in the market. Congratulations.

Max Daves 

Amazon launches Launchpad in the UK to highlight tech startups - Business Insider


Amazon is going to promote the most innovative products built by UK tech startups

REUTERS/Phil Noble An Amazon warehouse in central England. AMZNNov 16 13:10 635.01 -7.34 -1.14% Amazon is launching a new platform to help UK technology startups sell and market their products, according to a report in The Financial Times.

Launchpad, which has been available in the US since July, will provide a new shop window for UK tech startups looking to reach wider audiences.

Startups like computer kit manufacturer Kano and Wi-Fi enabled kettle creators iKettle will be able to promote their products through a new dedicated page on Amazon's UK website in exchange for an undisclosed cut of the sales, the FT reports.

The Seattle-headquartered retail giant will help startups to distribute their products to its millions of customers through its well-established delivery network.

Christopher North, managing director of Amazon.co.uk, told the FT that the move was an effort to help small businesses in the lead-up to Christmas, adding that many of Amazon's customers would miss these innovative products if they weren't showcased somewhere on Amazon's website.

"We know from talking to start-ups that bringing a new product to market can be just as challenging as building it," said North. "Amazon Launchpad gives startups support . . . so they can focus on inventing on behalf of customers."

Amazon will reportedly turn to US venture capital heavyweight Andreessen Horowitz and crowdfunding platforms like Crowdcube in order to identify the most promising startups to showcase on Launchpad.

Business Insider has contacted Andreessen Horowitz, which has invested in UK fintech star Transferwise, to see how this partnership will work in practice. We will update this story if we hear back.

It's not clear when Launchpad will go live in the UK but the US version of the platform can be seen here.

Video: An introduction to investing through equity crowdfunding | SyndicateRoom

An introduction to investing through equity crowdfunding | SyndicateRoom https://www.youtube.com/watch?v=-w8k0kuN_aE

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Max Daves CEO (idea)ology Group Co-founder Safe Haven Strategic Co-founder Market Financed Inventions

Can social entrepreneurs drive inclusive growth in India? - Agenda - The World Economic Forum


Can social entrepreneurs drive inclusive growth in India?

Over 60% of the Indian population still live on less than $2 a day. In the World Economic Forum’s Inclusive Growth and Development Report 2015, India is placed second highest in terms of net income inequality among 34 countries in the lower middle-income group.

India has made rapid strides in economic growth, but how can it maintain a healthy rise in GDP and also address inequality among its citizens? This will require structural changes and investment in growth-spurring areas, such as human capital. But it will also require equal opportunities for citizens: access to basic nutrition, education, energy and finance, as well as job and entrepreneurship opportunities.

Social entrepreneurs are key to delivering basic services and opportunities to India’s have-nots. Every year, the Social Entrepreneur of the Year Awards, organized by the Schwab Foundation and the Jubilant Bhartia Foundation, attracts hundreds of social entrepreneurs from all over the country. Some of them employ innovative, cost-efficient and often technology-enabled business models that offer basic services to those who lack access. Others are working hard at removing barriers that prevent access.

These entrepreneurs are not only outstanding in the Indian context, but also on a global level. It’s something we at the Schwab Foundation and World Economic Forum have seen confirmed time and again. Many of these organizations work at an impressive scale – serving millions of low-income households and transforming their quality of life.

One example is Aravind Eye Care System in Southern India, which focuses on curing blindness among India’s poor. The hospital chain has approximately 12,000-15,000 outpatient visits and 1,500 surgeries each day. Another example is Karuna Trust: its public-private partnership model serves more than 2 million low-income clients by transforming government primary healthcare centres into hubs of low-cost, high-quality healthcare delivery. Nidan, meanwhile, has organized close to a million workers in the informal economy across India into collectives and enterprises, secured their access to markets, technology and financial services, and successfully influenced government policy on their social and economic inclusion.

However, seen against the backdrop of social challenges facing the country, their efforts fall short; their impact is often limited to select geographies. How can India build on the wonderful work by these pioneers for social change on a national scale? The answer may not be in identifying more innovations; it may instead be in faster replication and scaling up of social enterprise innovations that we know work. For this, we will need to invest in best practices and capacities, removing barriers to scale, implementing conducive policies and fostering collective action across sectors.

True public-private collaboration is key to making this happen. When designing and implementing policies, the government should draw on the knowledge and experience of social entrepreneurs, ideas and dynamism of its youth, and capabilities of the corporate sector to plan and execute large-scale projects.

India’s young people are critical agents for replicating social enterprise ideas throughout the country – with half of its population under 25 years of age, India has an unrivalled youth demographic.

Beyond their direct reach and impact, social entrepreneurs represent a powerful idea, an idea that is relevant today more than ever before – that business can be a vehicle to create both economic value as well as contribute to building a fair and equitable society. India’s corporate champions have an opportunity to deepen their corporate global citizenship by joining forces with the government and social entrepreneurs in scaling these innovations.

Delivering on India’s inclusive growth agenda calls for multi-pronged interventions. One of them needs to be cultivating and nurturing its innovative social enterprises through public-private cooperation.

Author: Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum

Image: A girl studies while sitting on top of a taxi outside her shanty home at a roadside in Mumbai, India, August 11, 2015. REUTERS/Shailesh Andrade

How can we make entrepreneurship contagious? - Agenda - The World Economic Forum


How can we make entrepreneurship contagious?

Republished with permission from Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.

Linda Rottenberg and Chris Bierly argue in this opinion piece that the best incubator for entrepreneurship occurs when entrepreneurs form close networks and nurture fellow risk-takers with their experience and resources. Rottenberg was named one of “America’s Best Leaders” by U.S. News & World Report and one of TIME’s 100 “Innovators for the 21st century,” and is author of The New York Times bestseller, Crazy Is a Compliment: The Power of Zigging When Everyone Else Zags. Chris Bierly is a vice president and director in Bain’s Boston office, and a leader in its principle investments, media, education, and consumer and retail areas. Rottenberg is co-founder of Endeavor, which supports high-impact entrepreneurs. Bierly is a senior advisor at Endeavor.

Few ideas in business conjure more vivid images of bold individualism than the do-it-yourself entrepreneur. Entrepreneurs go it alone, the mythology insists. They are swashbuckling mavericks, bucking the establishment. The image is irresistibly romantic and deeply entrenched.

It is also completely misleading.

We have groundbreaking evidence that the most vibrant entrepreneurship is developed by high-impact entrepreneurs when they operate in tight-knit networks, nurturing fellow risk-takers and trading know-how, capital and tough love. We’ve mapped this cross-pollination across generations and continents. And we’ve done this not by looking at the most obvious communities, like Silicon Valley, but at some of the harshest terrain for innovation.

For years, academics and civic planners have agreed that entrepreneurship drives economic development, innovation and job creation.

Yet all too frequently, government-led initiatives produce lackluster results. We’ve seen this in Kuala Lumpur, where the $150 million BioValley project has yielded just a handful of biotech companies. In Moscow, officials have spent over $2 billion without a major start-up success. Even Santiago, well known for its Startup Chile program, has put $40 million into more than 800 start-ups, only to have almost 80% of them leave for greener pastures in places like Silicon Valley and New York City.

The problem in each case: No local network in which start-ups scale, scale-ups succeed and successful entrepreneurs infect the next generation with the entrepreneurship bug.

Since 1997, Endeavor, a non-profit organization in the field of high-impact entrepreneurship, has successfully worked to spawn “entrepreneurial ecosystems” around the world. With offices in 25 countries, Endeavor identifies, mentors and co-invests in entrepreneurs with the biggest ideas, the likeliest potential to build companies that matter and the greatest ability to inspire others. Endeavor focuses on this “high-impact” group because we believe that if you give them the right mix of support, encouragement and tough love, they can act as multipliers, becoming the role models, mentors and investors who build a local ecosystem of entrepreneurs from the ground up.

“ … They can act as multipliers, becoming the role models, mentors and investors who build a local ecosystem of entrepreneurs from the ground up.”

Endeavor’s more than 1,000 entrepreneurs have created over 500,000 jobs globally, generating $8 billion in annual revenues and giving back to the cities where they got their start. They have succeeded in building vibrant ecosystems in some of the most inhospitable business environments in the world.

To better understand how this dynamic works, Endeavor partnered with Bain & Company to study the multiplier effect in three difficult markets — Buenos Aires, Istanbul and Mexico City. The research supported what we have long seen on the ground: Entrepreneur networks don’t start with gleaming facilities or government guarantees, nor do they spring spontaneously from successful companies.

Instead, a few pioneering founders get the support they need at a critical early phase of their development and then actively spread the entrepreneurship fever by mentoring, inspiring and investing in subsequent generations of entrepreneurs. These founders aren’t Darwinian, surviving at the expense of others. They see cross-company collaboration as being good for their businesses and good for the ecosystem.

Patient Zero

Consider what’s happened in Buenos Aires amid a history of economic and political strife.

In the early 1990s, when Wences Casares moved there, the city was a wasteland for start-ups. Casares, the son of a Patagonian sheep farmer, had dabbled in business as a teenager, starting a T-shirt company and printing a telephone directory. In college, he had the idea to start an online brokerage called Patagon.com. Thirty-three local investors turned him down. “We don’t even have a functioning stock market,” he was told. He quit school and launched the company anyway.

We have come to think of Casares as “patient zero” in the spread of entrepreneurship in Argentina. While getting his business started in 1997, he met others burning with this strange passion. These included Andy Freire and Santiago Bilinkis, alums from Procter & Gamble who founded an online office-supply company called Officenet. Not long after, a pair of Stanford MBAs, Marcos Galperin and Hernán Kazah, returned to the country to form MercadoLibre, an eBay-style online retailer.

These neophytes created an informal support network –- a breeding ground for entrepreneurship — fueled by shared information, rivalry, co-investment and the conviction that they were pioneers. This network was buttressed by a novel consortium of local business leaders and outside mentors brought together by Endeavor. Even with this support, the young founders still felt misunderstood. Bilinkis told us, “When Andy and I decided to become entrepreneurs, the word ‘entrepreneur’ didn’t exist in Argentina.”

From this isolation, a fever of entrepreneurship overtook Buenos Aires, fed in large measure by the success of these three companies. In the span of a few years, Casares sold Patagon to Banco Santander for $750 million; Officenet sold to Staples; and MercadoLibre went public on the NASDAQ, reaching a market capitalization of $5.5 billion in 2014.

Today, Buenos Aires is in the midst of an entrepreneurship epidemic. Two decades after MercadoLibre, Patagon, and Officenet got their start, the city is the leading hub for tech entrepreneurship in Spanish-speaking Latin America. These three firms alone have influenced more than 200 second-, third-, and fourth-generation businesses. Their founders have launched new companies, VC funds, and even a popular TV show about entrepreneurship (“El Emprendedor del Millón”).

Whereas Argentine entrepreneurs once felt isolated and mistrusted, now anyone with a dream can tap into a thriving ecosystem of support. There are conferences, meetups, bars where founders congregate, dance clubs where they mingle, even a soccer league where each team is named after a start-up. Entrepreneurship has become a national obsession.

Entrepreneurship Is Contagious

How did this happen? To find out, Endeavor and Bain surveyed more than 200 Argentine entrepreneurs (some affiliated with Endeavor, many not) and asked them a number of questions, including: “Who inspired you? Who invested in your company? And who mentored you?”

We then followed up with dozens of in-depth interviews to identify specific ways in which entrepreneurs benefited from, or offered assistance to, others.

We found that nearly 80% of today’s tech companies in Buenos Aires trace their roots to Patagon, Officenet and MercadoLibre. We consider these first-generation entrepreneurs the super-carriers of the entrepreneurship virus. While their companies were individually successful, the firms had their biggest impact on the network by mentoring new entrepreneurs, investing capital in their companies, supplying experienced talent, and starting new ventures themselves. Our results show that from 1990 through 2006, the number of technology start-ups in the Argentine capital grew by 5% a year. But over the next five years, that rate accelerated to 20% annually.

The best way to visualize this phenomenon is on a social network map (see Figure 1). The bubbles represent companies and the multicolored arrows represent different types of connections. We placed companies on a series of concentric circles, like rings on a tree, based on their founding year. The size of each bubble corresponds to the number of connections it has made. The bigger a company’s bubble, the more influence that company and its founders have had on the rest of the network.

Figure 1

The role that these super-carriers play in creating and accelerating the growth of an entrepreneurial ecosystem is not unique to Buenos Aires. We repeated our analysis in Istanbul (see Figure 2) and Mexico City, and the results were essentially the same — a few very successful entrepreneurs spawn others and the effect multiplies over time. We then conducted 700 interviews in New York City to see if the phenomenon carries over to more mature economies. Starting with early pioneers like DoubleClick, connections there skyrocketed between 2003 and 2013 (see Figure 3), fueling a corresponding explosion in start-up activity. Today, over 2,000 tech companies in New York have attracted $14 billion in investment and employ 53,000 people.

Figure 2

Figure 3

How Entrepreneurship Spreads

The pattern of contagion in each of these markets is remarkably similar. The first phase is what we call the role-model effect, where the success of early pioneers like Casares inspires others. Pablo Orlando, the co-founder of GoodPeople, a rapidly expanding online community for action sports lovers based in Buenos Aires, remembers hearing about Casares’ $750 million Patagon exit when he was still a teenage skateboarder. It convinced him that being an entrepreneur could be a “real, sustainable career — a life choice,” Orlando said. “I thought, ‘If Wences could do it, I could do it too.’”

As powerful as role modeling can be, the influence of high-impact entrepreneurs runs much deeper. Their early success gives them the capital — human, social, financial — to reinvest in aspiring entrepreneurs. That powers the next generation and inspires those leaders to invest in the generation after that. The network helps entrepreneurs in three distinct phases of their careers, periods we call “Get Going,” “Go Big,” and “Go Home.”

‘Get Going’

Entrepreneurship doesn’t just spread on its own. It spreads because more experienced entrepreneurs actively cultivate the growth of those around them. For any young entrepreneur, a huge gap exists between drawing up an idea on a napkin and bringing it into the world. First-generation entrepreneurs help aspiring founders recognize the cracks in their businesses and how to address them with a revamped revenue model, a customer acquisition plan or an effective human resources strategy.

“Today, Buenos Aires is in the midst of an entrepreneurship epidemic…. The city is the leading hub for tech entrepreneurship in Spanish-speaking Latin America.”

Casares sets aside an hour a day to help others, usually in the late afternoon when he’s transitioning from work to home. The founders of Officenet, Freire and Bilinkis, set the goal of helping three new companies a year by making introductions, reviewing business plans and helping with fundraising.

Often what they tell aspiring entrepreneurs is not what they want to hear. Blunt talk is highly valued. As young students in Buenos Aires, Frank Bujaldon and Franco Silvetti sent many unsolicited emails to Officenet’s Bilinkis requesting a meeting. Eventually Bilinkis accepted, and Silvetti and Bujaldon showed up with a PowerPoint. “We had a solid presentation prepared,” Silvetti said. “But at the very start of the meeting, Santi asked us to close our laptops. He wanted us to tell him about ourselves, our experiences and motivations.”

Bilinkis advised the two to ditch their plan, finish their degrees, and go work for a company for a year or two. He met the pair 10 more times before they showed up unannounced one day and pitched him an idea to start an online restaurant reservation system called Restorando. Bilinkis liked the concept but not their approach. “They were young, hungry and smart,” he said. “But they were engineers, so they didn’t know how to start a company.” He and Freire nonetheless gave them $500,000 in seed capital to tweak their model and build a prototype.

They also introduced the pair to Nicolas Szekasy, an early MercadoLibre executive who, with Mercado Libre co-founder Kazah, had co-founded a $135 million venture capital firm called Kaszek Ventures. Szekasy in turn introduced the Restorando founders to Niklas Zennstrom, the co-founder of Skype and leader of the global VC fund Atomico, who helped them complete a Series A round of more than $3 million – a rare sum in Latin America.

‘Go Big’

One of the biggest misconceptions about how entrepreneurship spreads is that it’s all about that first leg up. That’s critical, of course, but young entrepreneurs also need help managing the treacherous process of scaling a fast-growing enterprise. Our research clearly indicates that one reason entrepreneurship has blossomed in these communities is that older entrepreneurs didn’t just sprinkle some goodwill and angel investing and then disappear. They stuck around to help their younger colleagues navigate tricky growth decisions.

Juan Carlos Vera and Andres Rodriguez were childhood friends from Colombia who started a technology business that was soon wiped out by the country’s financial crisis. Years later, after Vera built a mobile solutions firm and Rodriguez helped build Apple’s Siri, the two reunited in Mexico City and developed a proprietary technology that helped companies use artificial intelligence to communicate more efficiently with customers.

Their company, BlueMessaging, got off to a promising start, growing at more than 100% annually in its first three years. But when growth slowed, Vera and Rodriguez knew they needed help. They turned to a community of entrepreneurs around Mexico City who were eager to lend a hand.

One issue: All the employees at BlueMessaging were young and green. Alonso Carral, an established entrepreneur who started Mexico’s first Internet service provider (ISP) and sold it to CompuServe, told the founders they needed more grown-ups around the office. “He explained to us we did not have a finance or marketing problem, we had a people problem,” Rodriguez said. Carral helped the BlueMessaging duo find a headhunter, and the two hired a CFO, COO and others, including an experienced hand from Boston Consulting Group.

“Older entrepreneurs didn’t just sprinkle some goodwill and angel investing and then disappear. They stuck around to help their younger colleagues navigate tricky growth decisions.”

Sometimes, the most critical advice is as much about eliminating options as creating them. When Firat and Fatih Isbecer founded Pozitron, an Istanbul-based mobile money business, for instance, they met Wences Casares through Endeavor. At the time, Pozitron had some traction in mobile solutions but was tempted by other adjacent businesses. “Wences encouraged us to move away from other services we were offering such as [customer relationship management] and focus solely on mobile solutions,” Firat said. The advice paid off. The Isbecers sold Pozitron in 2014 in an exit worth $100 million.

Helping founders decide when to exit and how to do so gracefully is invaluable. In the mid-2000s, Globant, one of the fastest-growing IT companies in Buenos Aires, faced a tricky decision: Sell the company to one of several willing buyers or risk holding on amid Argentina’s mercurial economic environment.

Globant’s CEO, Martín Migoya, and his co-founders had been inspired early on by MercadoLibre and turned once again to the Buenos Aires network for advice. The message was clear: “Your outlook is strong and you have real prospects for growth. Turn down the money.” Migoya and his partners wavered, but felt buoyed by the support. “We could have been millionaires at the age of 30,” he said. “It was very tempting. But we decided that we should not sell.” Instead they continued to expand and Globant, which went public on the NYSE in 2014, is now valued at $1.1 billion.

‘Go Home’

One of the more striking things we found in studying these ecosystems is how willingly entrepreneurs gave back to the network and their communities once they achieved their own success. When young entrepreneurs get support from first-generation founders, the unspoken message is that it’s their duty to pay it forward to others. In countries without long histories of business collaboration, this shift in mentality is critical. It helps to create a virtuous cycle in which the mentored become mentors and the students become teachers.

“Entrepreneurship doesn’t just spread on its own [but] because more experienced entrepreneurs actively cultivate … those around them.”

A growing network of tech entrepreneurs in Istanbul shows how this cycle works. Equal parts friendship, business and mentorship bond this group. Members play poker together, go clubbing together and vacation together. At 39 and 47, Nevzat Aydin and Sina Afra are the senior members of the group. They met in the 2000s when Aydin was starting Yemeksepeti, an online food ordering company, and Afra was starting Markafoni, a flash-sale website similar to Gilt Groupe. In 2011, Naspers, the South African media giant, acquired Markafoni at a valuation of $200 million, making Afra an instant rock star in the tech community. Four years later, Aydin sold Yemeksepeti to Delivery Hero for $589 million, making it the largest tech exit in Turkey’s history.

Having “gone big,” Aydin and Afra turned back to Istanbul, the city that helped them get their start. As trusted advisers, they helped the Isbecer brothers expand and sell Pozitron. They also became mentors to a new generation of entrepreneurs like Hakan Bas, the founder of Lidyana, Turkey’s leading online jewelry and accessories business.

When Bas made headlines after becoming romantically involved with a model, Aydin called him up. “People now know you as someone dating a model rather than the CEO of your company. Your personal life is overshadowing your professional life.” Bas was jolted, but grateful. “Lots of people give me advice about business; he’s more focused on coaching me as a leader.” The mentorship isn’t free, however. Bas pays Aydin back by paying it forward. “Before, I used to say, ‘I will help out if I have time.’ Now I say, ‘I will make time to help out.’”

This is the virtuous cycle in action — one generation helping the next for the good of the entire system. To MercadoLibre’s Galperin, these ecosystems mark a generational change in how business is done. “They are shifting people’s thinking from a winner-take-all mentality to one where everyone benefits from the group’s success.”

But for anyone looking to create this kind of dynamic climate for business and innovation, it is crucial to understand that it doesn’t just happen because somebody builds an incubator or creates a seed-financing fund. It requires seeking out the high-impact entrepreneurs in a given market and helping them scale through the right mix of mentorship, investment, connections and resources.

Once a handful of local scale-ups have succeeded, the multiplier effect can take hold and the ecosystem can begin to sustain its own growth. That creates a deep reservoir of support and resources that companies can draw on throughout their life-cycle, from start-up to maturity.

We’ve seen time and again, even in the most challenging business environments, that high-impact entrepreneurs exist in every market. The key is finding them, helping them scale and encouraging them to let the contagion spread.

Publication does not imply endorsement of views by the World Economic Forum.

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Author: Linda Rottenberg was named one of “America’s Best Leaders” by U.S. News & World Report and one of TIME’s 100 “Innovators for the 21st century,” and is also an author. Chris Bierly is a vice president and director in Bain’s Boston office.

Image: A businessman avoids puddles. REUTERS/Luke MacGregor.

Exposed: China’s covert global radio network

Exposed: China’s covert global radio network

 “We should increase China’s soft power, give a good Chinese narrative and better communicate China’s message to the world,” Xi said in a policy address in November last year, according to Xinhua.

CRI head Wang Gengnian has described Beijing’s messaging effort as the “borrowed boat” strategy - using existing media outlets in foreign nations to carry China’s narrative.

How Content Creators Can Deal with a Boss Who Doesn't Get It

How Content Creators Can Deal with a Boss Who Doesn't Get It

In-house marketers, agency creatives, and freelancers can all master the art of communicating with their manager. How can you, as a writer, ensure that your stories are successful and that you exceed your manager’s expectations?

Article: Crazy As It Sounds, Solar Could Be The World's Most Important Energy Source By 2050

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Max Daves CEO (idea)ology Group Co-founder Safe Haven Strategic 314-346-2268

Article: The Big Future: Can we build a better brain?

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Max Daves CEO (idea)ology Group Co-founder Safe Haven Strategic 314-346-2268

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Article: How Crowdfunding Is Changing The Way Startups Raise Money

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Max Daves

Blueprint for better business

Blueprint for better business

Blueprint for Better Business gives companies a 'get out of jail free card'

Corporations have lost their moral compass and need to return to a core sense of purpose if there is to be any hope of creating a sustainable society, according to a new initiative launched today. Blueprint for Better Business (BBB) springs from the belief that the corporate sector must come back to the overriding importance of our common humanity. The project, inspired by Cardinal Vincent Nichols, Archbishop of Westminster and supported by Paul Polman, chief executive of Unilever, calls for each person to be recognised “as a social being, dignified by relationships and seeking the highest fulfilment in the service of others”. While the initiative highlights the disastrous impacts of short-termism, profit maximisation and a shareholder centric view of the world, will an approach based on faith teachings and moral philosophy succeed in transforming businesses in a way that many other more practical sustainability initiatives have failed? The basis of BBB’s analysis is spot on. The worst of selfish business behaviours have also shaped narrow-minded personal behaviours. To restore trust means re-embedding business within a social contract. This requires corporations both big and small to ask themselves some pretty deep questions, such as why they exist and what is a fair return for responsible investors. BBB also correctly points out that companies must enable and welcome public scrutiny if society is to trust their actions are aligned with their purpose. But where the initiative struggles is in losing some of its deep and meaningful philosophical and religious underpinnings by feeling the need to translate everything into the straightjacket of business-friendly language. A get out of jail free card Spiritual principles are reduced to more prosaic notions of being honest and fair with customers and suppliers, a good citizen, a responsible and responsive employer and becoming a guardian for future generations. This is a mistake as it gives companies a get out jail free card by giving the impression that existing corporate responsibility programmes embrace what BBB is expecting from them, with perhaps a little tinkering at the edges. The fact is that most directors are in denial and are desperately seeking to shore up their belief that they are on the moral high ground. To give an example, a recent private meeting of chairmen from major companies, organised to talk about their responsibilities to society, quickly descended into bitter complaints by the grey-haired business leaders that they and their peers are not appreciated or recognised for the jobs they create and the taxes they pay. The reason they think this way is that ethics, like the environment, tend to not have a voice at the top of major corporations, with the exception of a few rare cases. The financial collapse showed us what has really been going on in boardrooms. As long as there is money to be made vaguely on the right side of the law, then anything goes. Not much has changed since then, with the Bank of England warning only this week of continuing “deep rooted problems” in the City that are undermining public trust in the financial system. I interviewed the former chief executive of Tesco, Phil Clarke, just before he was shown the door, who waxed lyrical about the retail giant’s commitments to behaving responsibly, and yet just a few months later the board is in disgrace. A culture of secrecy prevails Other concerns are that BBB does not yet have a comprehensive methodology that companies can follow, although there are plans next year to run “ deep immersion “ courses for individual companies. Also there are no formal requirements for companies to post progress reports or any meaningful sanctions if companies sign up and then do very little. What is required to become a member of the movement is drawing up a purpose statement and holding a board discussion at least once a year to review progress. I hope I am being overly cynical, because I would love nothing better than to see leaders in both business and finance stand back from their day-to-day work and contemplate who they are and how this relates to what they do. Done honestly this would lead to a revolution. But I am not holding my breath. An expert who coaches senior executives pointed out to me only this week that while those he works with understand only too well the language of money and competition, they get completely flummoxed when they enter the terrain of moral philosophy or spirituality. They can’t even conceive how to connect this to their day job. Given BBB is based on faith teachings, the power of redemption is missing from their analysis. We have seen many examples in recent years of how forgiveness can allow the past to blossom into a more positive future. One is the success of the truth and reconciliation commission in South Africa set up in the wake of apartheid. But corporations, which thrive on their sense of power and control, hate nothing more than having to say sorry unless they are forced to do so because they are squirming on the end of a hook for doing something particularly reprehensible. Even then, they rarely mean it. BBB talks of the importance of inviting civil society in to see how they work from the inside but corporations have repeatedly shown they value secrecy and all to quickly turn to the courts, political lobbyists and their army of PR advisors to block any inconvenient truths. The corporate sector will be able to move into a new age only when it deals with its hidden guilt and shows the humility, vulnerability and open-heartedness that are the fountainhead of trust. Disclosure: Andrew Miller, chief executive of Guardian Media Group, was on the steering committee which helped develop Blueprint for a Better Business Read more stories like this: The values-led business hub is funded by SC Johnson. All content is editorially independent except for pieces labelled advertisement feature. Find out more here. Join the community of sustainability professionals and experts. Become a GSB member to get more stories like this direct to your inbox