The Opportunity of Our Lifetimes

Our generation–those born in the 70s, 80s, and 90s–has a great opportunity ahead of ourselves. We have the ability for the first time in human history to eliminate extreme poverty within our lifetimes and ensure shared access to prosperity regardless of color, geography, or nationality. This possibility is worthy of a boisterous cheer.

By 2050, we’re projected to have 9.5B humans on this planet, however. Our planet will not allow a world of 9.5 billion humans living in the manner the average citizen of the Western world lives today, yet alone the 6.6 billion we have today.

Here inlies the great connection between sustainability and poverty. Unless we as a global society invest to develop the needed technologies to allow for humans to become sustainable in food, energy, and water production we will end up having less resources than are necessary for 9.5 billion people to live in a world without extreme poverty–let alone a world in which there is true shared prosperity, mutual security, and equality of opportunity. This is the greatest challenge of our lifetime as entrepreneurs, social entrepreneurs, scientists, technologists, and public servants. We must have sustainability to end poverty.

As a friend of mine from high school recent wrote me, “We must work toward the creation of a world where the standard of living, human rights, basic freedoms, and sustainability are all compatible.”

The two billion people that Goldman Sachs projects will be added to the global middle class by 2030 may never make it if sufficient food, energy, and water resources don’t exist. Dominic Wilson and Raluca Dragusanu, showed in a Goldman Sachs Economic Research paper published on July 8 called “The Expanding Middle: The Exploding World Middle Class and Falling Global Inequality” that close to 70 million people a year are entering the global middle class. They define this range as those with per capital income $6,000 and $30,000, purchasing power parity adjusted. They foresee shifts such as:

1. Changing spending patterns.
2. Increased pressure and competition for resources
3. Greater threat of environmental degradation
4. Rising environmental consciousness
5. Political and social changes

Through one lens, we could have resource wars, strife, famine, and terrible droughts, melting ice caps, biodiversity extinctions, and rising sea levels.

Through the other lens, we could have a world of growing prosperity, security through commerce, and gained respect among cultures and religion, a world of ubiquitous broadband, a world of communications technology that will enable humans to gain a common language and understanding, a world in which dictators can no longer use scare propaganda to wedge the false division of us vs. them, a world in which there is access to education, healthcare, nutrition, and opportunity for all, a world in which entrepreneurship thrives and technology drives improves food production, water access, and non-carbon based energies, a world in which our identity as human is so much more important than what divides us.

We have come to a turning point in history. This is both the challenge of our lifetime, and the great opportunity of our lifetime. How can we enable the great economic and creative potential for all humans while ensuring we leave a world of environmental stability to our grandchildren?

Will we invest in the creation of a new Apollo Plan for Energy? We will create the Global Bill of Rights that provides access to education, healthcare, and nutrition? Or will we fall into a once great society as the benefit of inexpensive petroleum leaves? Will Malthus finally get his way?

Is growing economic prosperity possible in a world of declining resources and increased commodity prices? Does our lifetime end up being marked in history as the time of resource wars, increased poverty, and environmental damage? Or does it end up being marked by global collaboration, shared prosperity, and sustainability. We have a choice.

This is the greatest opportunity of our lifetime, and our greatest challenge.

$1M Prize for Best Developing Country Technology Innovation

Legatum Group, founded by Chris Chandler and based in Dubai, has announced today at Fortune Brainstorm Tech in Half Moon Bay, California a $1 million prize for the best technology innovation from a for-profit company in the developing world. I will update this blog when they post details on how to enter.

I wanted to write this post as from all appearances, Legatum seems to be making a concerted effort to invest in long-term sustainable development in developing countries and putting their money where their mouth is. They are a sponsor to the Fortune conference here, and are mostly unheard of. Even their original company Sovereign Global, is nearly unheard of. Yet they manage over $4B in capital invested in India alone.

Legatum is the donor to the Legatum Center for Development and Entrepreneurship at MIT. They invested $50M in the Center to obtain naming rights. Here is a short video I took this afternoon of Iqbal Quadir who is the founder and Director of the Legatum Center for Development and Entrepreneurship at MIT.

Although Dubai-based, the group is made up strictly of Westerners, mainy of whom previously worked at Chris Chandler’s Sovereign Global. They claim a 40% CAGR over the lifetime of thier original fund started in 1986. The President of Legatum, Mark Stoleson, attended Occidental College and Duke. The other chief team members attended Wharton, London Business School, Babdon, Oxford, and University of Brisbane and has worked at law firms, JP Morgan, Goldman Sachs, and PWC.

I do wonder if most of these individuals are based at the head office in Dubai, which is slowly on its way toward challenging London and New York for the global capital headquarters. If you can find any statistics on capital under management for equity investment firms based in New York, London, Hong Kong, and Dubai please let me know.

Legatum Group is also the creators of the Africa Prize, which gave away $450,000 in 2007 to the most innovative businesses in Africa. Their philosophy is simply that for-profit businesses are more efficient at creating positive social improvement than bi-lateral foreign aid which in their Easterlyan-like view too often has created dependency.

Sustainable Capitalism and The Role of Aid vs. Trade in Prosperity Creation

I picked up a glossy investment prospectus from a firm called Legatum Group at up at the Fortune Brainstorm Tech conference today. A statement inside caught my eye. It stated:

“While aid can play an important role in alleviating immediate needs, its impact is naturally limited since it is neither sustainable nor scalable.” Seperately, it states, “Quite distinct from the limited scope of charitable initiatives, businesses are both self-sustaining and scalable. Legatum directs its attention towards promoting entrepreneurship and business for all its social benefits within developing communities.”

I wanted to to take a chance to think more about the nuance of the right type of aid vs. the right type of trade and investment.

I feel presently that the answer to reducing poverty and increasing access to opportunity and prospectity in developing nations is three fold. The answer is A) for-profit private capital investment into sustainable companies that are socially responsible (or at least not socially irresponsible) AND B) direct “aid with standards” to community-based non-profit organizations run by local social entrepreneurs that are efficiently serving the needs of their communities AND C) efficiently run transparent government that creates and protects a system of law and property rights.

The question that should be asked cannot be as black and white of aid vs. trade. It’s not aid OR trade. It’s accountable aid AND sustainable trade AND efficient goverment. It’s a public/private/community partnership that does not succeed without participation from each sector. The questions that we as a society should be asking is how to make direct aid measurable and accountable AND how to make trade and investment sustainable AND how to make government efficient and transparent.

These methods of human and capital investment are on the spectrum of socially responsible venture philanthropy that builds human capital, infrastructure, and standards of living through education, medicine, nutrition, and technology that enables us to do more with less resources. At the end of the day–all private sector and public sector investment should come back to efficiently serving the needs and desires of the local population in a sustainable manner.

What the answer to prosperity creation seems not to be is the traditional bi-lateral government to government aid (read: loans that local populations will have to pay back to buy our stuff from our companies) nor traditional private capital investment in companies that are not socially responsible and end up hurting local environments. This of course is the very common and very key “aid vs. trade” question that so many like Sachs, Easterly, Collier, Stiglitz, Pralahad, and Gates have debated.

So what is the import of this debate and why is a tech CEO talking about it? The great war of ideas of the 19th and 20th Century between pure communism (total state control of the economic sector) and pure capitalism (total market control of of the economic sector) is giving way to an “end of history” state that could be simply called “Sustainable Capitalism.”

Sustainable Capitalism could be defined as a state in which competitive market economies that are based on environmental sustainability, democracy, transparency, communication technology, an educated populace, and a government with a limited but very important role in setting the rule of law, thrive while efficient social entrepreneurs with services that produce a public good are invested in with capital with measured returns and public servants integrate the same communication and ERP systems of the best-run companies in the world.

In this new Zakarian model of economic system, companies that destroy the environment, provide a negative net benefit through off-balance sheet externalities, or exploit their populations are video blogged and written about and pressured through market forces to reform or wither. This is perhaps somewhat idealist today–but it is the path I believe we are on. The fact that all companies must be sustainable soon enough for the system to scale and prosperity to be possible for all humans is clear. This trend will accelerate as we enter into the coming age of ubiquitous broadband and improved technology of the citizen blogger and as resources become less available. Governments, non-profits, and businesses will have a much higher level of accountability. This assumes of course people have incentives to work toward shared prosperity that can continue beyond the short-term, and I think that is a fair assumption and a vision shared by the global connected youth of today that I know.

What’s the common denominator for human invesment in either the public or private sector? Return on invested capital, as long as the definition of return is broadened to include social returns and the definition of cost is broadened to include environmental degradation. This is the Net Domestic Product (NDP) approach versus the Gross Domestic Product (GDP) approach.

So am I criticizing the Legatum brochure statement? No, not really–I just hope they share the belief–and I am sure they do–that prosperity in the developing world and continued sustainable improvement can only be possible if we find methods to enable entrepreneurs, social entrepreneurs, and public service entrepreneurs to transparently, efficiently, and sustainably make investments that maximize individual utility, return on investment, and the public good.

The effort toward sustainable capitalism and efficient government requires an improved ability to communicate, collaborate, and measure results. There’s a digital generation of entrepreneurs and social entrepreneurs that gets this who will be the global leaders sooner than you might imagine.

At Fortune Brainstorm Tech in Half Moon Bay, CA

Today through Wednesday I am the Fortune Brainstorm Tech conference in Half Moon Bay, California, about 45 minutes south of San Francisco. After a Segway tour along the Pacific this afternoon, the sessions began at 4pm. We’ve heard from Michael Dell, Jeff Bezos, Marc Benioff, and Brad Smith, the CEO of Intuit.

Here are some notes on what some of the panelists spoke about:

Dell

• 500,000 people per day who come onto the internet for the first time
  large majority are outside the United States
• Long term bull on the long term impact technology can have on society
• Came back as CEO for second time
• Put his ‘big ears’ on, listened to the employees
• Thought of themselves as a company that listened
• Will have about 2 billion conversations with our customers this year
• centrally controlled tops-down is not most response way
• We should have fiber to the home

Benioff

• It’s not just company talking with customers, but customers talking with eachother in a one to many conversation
• Customers are able to gang up on us
• The acceleration of the soul of the world
• Fareed Zakaria - Post-american World
• The internet is the great accelerator in societal evolution
• A change in the world can only happen if there is a change in conciousness
• Dalai Llama - world peace comes through inner peace
• web 1.0 - transact
• web 2.0 - collaborate
• web 3.0 - innovate (via platform)                                                         

Brad Smith, 5th CEO of Intuit in 25 years

• 50 million end users
• Connecting florists with florists in different zip codes
• Intuit now 50% SaaS

Other livebloggers at the conference include:

• Joi Ito
  Chief Executive Officer, Creative Commons
• Rebecca MacKinnon
  Co-founder, Global Voices
  Assistant Professor
  University of Hong Kong
• Amy Messenger
  Managing Director, U.S. Technology Practice Head
  Ogilvy Public Relations Worldwide
• Chris Elam
  Founder and Director
  Misnomer Dance Theater
• Rodrigo Sepulveda Schulz
  Chief Executive Officer, vpod.tv
• Aaron Houghton
  Co-founder and Chairman, iContact
• Frank Shaw
  President, Microsoft Accounts, Worldwide
  Waggener Edstrom Worldwide
• Richard Edelman
  President and CEO, Edelman
• Ryan Allis
  Co-founder and CEO, iContact
• Ross Mayfield
  Chairman, President, and Co-founder
  Socialtext
• Thomas Crampton
  Director, New Business Development
  Next Media
• Per Mosseby
  Chief Executive Officer, Islanders
• Steve Jurvetson
  Managing Director
  Draper Fisher Jurvetson
• Bart Becks
  President International and Director
  Netlog
• Julia Boorstin
  CNBC
• Oliver Marks
  ZDNet
• Bruce Carlisle
  CEO, Digital Axel
• Susan Hassler
  Editor in Chief, IEEE Spectrum
• Daniel Kaufmann
  Director, Governance and Anti-Corruption, World Bank Institute

Celebrating 5 Years at iContact

The team at iContact celebrated the company’s 5th anniversary and reaching over 100 team members on Friday afternoon at our offices in Durham. We had BBQ from Thrills from the Grill underneath two large tents in our parking lot with bluegrass band Second String Fiddle adding to the sounds. Aaron and I went up in a hot air balloon to unveil our new sign on the building as the team sang “Happy Birthday” below. Magicians, balloon makers, bouncy castles, dunk tanks, and a few gusty winds added to the excitement.

Getting iContact to 106 employees and 29,000 customers would not have been possible without a supportive Triangle community, our wonderful team, investors who believed in us when few others would at NC IDEA, and our wonderful Series A backers Updata Partners. Thank you to everyone who has helped make iContact what it is today. Here’s to the future and the opportunity and many challenges ahead.

Thanks especially to Christina Jaromin and Chuck Hester and to our team members who helped organize the event!

Picture courtesy of We Love Durham NC Blog

This Page May Contain Content That is Not Consisent With the Moral Cultural, or Social Values of the UAE

I was in Dubai for a night two weeks ago on my way to Uganda and tried from my Holiday Inn Express in Dubai Internet City home of the Middle East campuses of Sun Microsystems, Cisco, and EMC and to access a blog called Secret Dubai Diary. The site came up in a Google search for Dubai nightlife. When I tried to access the site, I got the lovely “Surf Safely” message above, indicating that this site was “inconsistent with the moral, cultural, or social values of the UAE.” Unfortunately for the government censors in the United Arab Emirates, they didn’t think to block the Google Cache version of the page.

It was very reassuring that UAE recognizes the Internet as a “powerful medium of communication, sharing and serving our daily learning requirements.”

If you wish, you can send an email to “safesurf[at]du.ae” to share your view of Internet censorship.

Thoughts on Uganda

I was in Uganda from June 29-July 6. I was there to visit two non-profit organizations I have been involved with and contributed funds to in the past. It was my first visit to Africa, and definitely will not be my last.

Uganda really is a beautiful country. It has lots of challenges, yet lots of real opportunities. Seeing the extreme poverty that exists there first hand was difficult, yet instructive and very helpful to my understanding of the issue. 89% of Ugandans are currently subsistence farmers, so a great majority of the population lives in rural villages. It was very common to see families of 6 to 8 living in mud and stick one-room shacks with tin or grass roofs with dried dung floors with no running water, toilet, or electricity. The primary school we visited in Mityana in the West had neither windows nor doors and had dirt floors.

Even more difficult is the realization that the difficulty of the living conditions I saw in the rural areas pale in comparison to those in the refugee camps 300 miles to the north in Northern Uganda, centered around Gulu which was the center for the LRA activity, which has significantly calmed since the 90s. I was amazed at the extent to which the children and most adults living in these most difficult conditions maintain such a level of happiness and non-complaint.

It was a bit unnerving to see out front of every bank and gas station an armed security guard with a rifle or shotgun. The traffic is absolutely insane, enhanced by the pavement ending at times. At one point we were passing a car that was passing another truck, and got driven into the shoulder on the other side of the road. That type of experience was common. There are no medians and the highways are all two lanes. There are just three stop lights in Kampala and none elsewhere in the country.

The thousands of Boda Bodas (motorcycles) and Matatus (bus taxis) all over and the pedestrians crossing allover add to the confusion. And not to mention the cows, which are often in the road calmly walking across. Cows and goats tend to be tied up to the side of the roads so they can be used for mowing. Babies run around naked or just wearing shirts, often with no parents in sight, and kids from 3 to 12 wearing bright purple, yellow, green, or blue school uniforms can be seen walking along the side of the roads for miles around 8am and 5pm each day. The kids would often smile and yell out “Muzungu” which means white person when we drove by.

The current Museveni administration has been in power since 1986 and while it seems to be succeeding in providing some basic services, the roads are still very spotty and the electrical grids shut off a few hours per day outside Kampala. Many are calling for him to leave, not because he’s doing a horrible job but because he’s been in power 22 years. They seem to have a good freedom of speech there and an opposition newspaper. People we spoke to were not shy to offer their criticisms. Many people were speaking about Mugabe and his visit to the African Union last week and hoping for his ouster.

The economy is growing. The competition between CelTel, Warid, Uganda Telecom, and MTN for cell phone was intense. All the services sell Airtime Credits rather than monthly subscriptions since most Ugandans do not have a fixed postal address nor a credit card. These four companies advertise literally everywhere, including painting in exchange for compensation thousands and thousands of buildings and homes along the side of all the roads.

Uganda now has GPRS service which allowed me to access my Blackberry email without a problem most of the time even in very rural areas.

They also are deploying 3G service in the major cities. I saw a number of iPhones there among lawyers and professionals. The biggest employer in Uganda is interestingly Coca Cola. There are tremendous opportunities to invest in alternative energy production, especially in regards to biomass. Roey and I had a chance to visit Torero Cement, the largest cement factory in Uganda on Friday as he’s working with them to supply biomass so they can reduce their coal usage. The economy remains a cash economy. I did not find a single store or company that accepted credit cards outside of the airport.

We stayed with an investment banker who runs Daro Capital on Friday night in Kampala. He help a get together of a group of technology execs and professionals on Tuesday night, including a gentleman who is starting an SMS marketing service. I spoke to a number of people to get a sense of the ripeness for email marketing. Rough statistics, but it seems right now about 25pc of Ugandans have email addresses, though most check them via Internet Cafes. Broadband access is only available via Satellite at a cost of USD$1000 per month, so even the professional class and wealthy have only dial up or GPRS access. A T1 is being installed in Uganda in 2009 after which access will go substantially up.

We visited Entebbe and Kampala on Day 1, Mityana on Day 2, Mbale on Day 3 and 4, and Torrero on Day 5, and Mukono on Day 6. We also drove though Jinja and saw the source of the Nile river.

In Mityana, we visited Nourish International Students working at Naama Millennium School, a school funded by Dr. Christopher Kigongo, who now lives in Durham most of the year and was the former Director of Health Education for Uganda. In Mbale, we visited the Foundation for the Development of Needy Communities (FDNC) which has a vocational school and special needs school founded by Samuel Watulatsu, who presented at a Entrepreneur & Social Entrepreneur Meetup at our house in Chapel Hill last October.

On the way there I spent a day layover in Dubai. Dubai is one of the 7 emirates in the United Arab Emirates, so it’s the size of a county and has 6-7 cities in it, that have names like “Internet City, Media City, and Sports City.” The amount of construction and cranes there was immense. The Emirate boasts an indoor skiing area, and man-made islands in the shape of a palm tree and one in the share of the world. They have built the largest building in the world, the Burj Dubai, shown in picture 4. It is still being finished. When it is done next year it will be 166 floors and 2100 feet tall.

Bottom line, the experience has caused me to be even more dedicated toward spending the rest of my life working to increase access to education, healthcare, food, and technology and working toward ending warfare and ensuring sustainability. I look forward to going back again soon.