April 15, 2010
Why I’m At Skoll…
I’m in Oxford, England today for the first full day of the Skoll World Forum on Social Entrepreneurship. I’m making great connections with investors who care about social impact equally to financial returns and learning how iContact can be a more socially responsible enterprise.
Our vision for iContact is to “Build a great global company based in North Carolina for our customers, employees, and community.”
So I’m here to ‘go to school’ for three days on how to truly maximize return for customers, employees, and community so that we can in turn maximize financial results for our shareholders. Fiduciary duty can go along with human social duty!
To me, having a formal CSR program and caring about impact for the customers, employees, and community is just good business sense that in fact maximizes financial return.
Increasing Financial Results By Focusing On Social & Environmental Impact
Personally, I strongly believe, in today’s new world, ensuring your business provides a positive social and environmental impact (or at least not a negative one!) will increase your financial return, not decrease it. I’ve seen this happen with numerous for-profit socially responsible companies like Ben & Jerry’s, The Body Shop, Whole Foods, Burt’s Bees, and Salesforce.com.
How can focusing on social impact improve financial results?
How can focusing on social return improve financial results? In three simple ways.
- The type of employees who want to work at companies that care–companies that put equal emphasis on profits and purpose–are the most productive and often most aware and intelligent team members.
- There is a growing movement toward consumers who care. Consumers will have much more brand loyalty to a company that they know cares and makes a positive social impact.
- When customers become passionate about a brand they talk about it more and more people will write about it.
The Tipping Point
After 30 years of so many in the social enterprise field working towards this, the tipping point has been passed wonderfully and thankfully. As the Dean of the Oxford Said Business School Colin Mayer said last night, the financial crisis has shown that short-term focus on only financial results does not lead to long term success.
Organizations like B-Labs have succeeded in changing public policy toward the benefit of companies who care. Self-interested (”greedy”) business owners who want to make money will now wonderfully benefit financially from implementing a formalized Corporate Social Responsibility program and ensuring they track and social impact and environmental impact.
The invisible hand is now starting to work toward social good with economic growth now that incentives are being realigned properly toward sustainable economic growth. While there is much more path to tread toward truly aligning policy incentives and consumer purchasing behavior toward companies who care–it is happening and the tipping point has passed! Eureka!!
Social Good With Market Returns?
Right now a panel called ‘Social Good With Market Returns’ is about to begin. I’ve been tweeting a lot about the conference via @ryanallis.
The moderator is Herta von Stiegel of Ariya Capital.
The speakers are:
Nick from JP Morgan is talking about the Social Finance group at JP Morgan. Nick is not a “normal banker.” They invest in social enterprises that have a double-bottom line (financial and social). This social investing field is also being called “Impact Investing.”
Ensuring Off-Balance Sheet Externalities Are Positive
There is a engaging discussion going on now at the panel around off-balance sheet externalities (positive and negative) of impact (positive or negative). Nick says “every time we make an investment we are creating externalities.” He says these externalities can be positive (jobs) or negative (pollution). He says “for the first time the investment community is measuring the social impact of what they are doing and only investing in companies that create net positive externalities.”
This discussion is at the core of global history of the past 200 years as the ideological battle between communism, socialism, and capitalism has been waged. The new consensus that is emerging here is that what has won (and in fact what must win for the sake of humanity’s ability to continue) is socially responsible capitalism. As John Perkins points out in Hoodwinked, there is nothing inherent in the model of Capitalism and the competitive market economy that require off-balance sheet externalities that destroy the world.
Taking Into Account the Full Cost of Environmental Damage
Now the discussion is revolving around how to adjust public policy to enable the true cost of negative externalities to be accounted for in the financial accounting results. Some are saying the Holy Grail for improving the world through business is to make all investing ‘impact investing’ by taking into account the true cost of environmental resources that are not renewed into Generally Accepted Accounting Principles (GAAP).
“Better accounting for negative externalities is really important” said John McCall MacBain of the McCall MacBain foundation just now on the panel. The discussion is revolving around environmental costs being forced on any organization that destroys a natural resource (public good) that does not replace it sustainably and the impact this would make on ensuring warped incentives are not provided to global financially-focused Boards of Directors.
The discussion has shifted to bringing the silos of philanthropy, impact investing, running non-profits and socially responsible for-profit entrepreneurship.
Borrowing a meme from my friend Judith Cone who worked at the Kauffman Foundation and now works at UNC as a Special Assistant to the Chancellor for Innovation and Entrepreneurship, perhaps it is all about where goodness lies. Goodness can be in the heart of the public sector official, for-profit socially responsible entrepreneur, non-profit executive, global multinational Board member, activist, or investor.
Nick O’Donohoe from JPMorgan is speaking about how JP Morgan can access capital high net worth individuals and institutions they work with which want to tap into investment funds specifically set up for investing in companies who put an equal emphasis on social impact as financial results.
Questions & Comments?
What questions are there on this topic of public policy changes and investing in companies that create social good while achieving market returns or above market returns? I’d love to discuss this more!
You can follow tweets from the Forum here.
April 15, 2010
What Comes After Microloans?
As a technology entrepreneur and angel investor in both North Carolina and East Africa, I’ve been thinking about what comes next in microfinance? To me, it’s microequity.
I had a fascinating breakfast this morning here in Oxford on the topic of microequity. The field of microequity is nascent, but rapidly growing. To me microequity is investing small amounts in for-profit socially responsible companies, particularly those in the developing world. I’d consider the core of microequity investment ranges are between $5k and $100k in for-profit socially responsible companies in the developing world.
Microequity investing can fill a tremendous need for capital for SMEs that can help a small business grow when microloan maximums have been reached but an entrepreneur is not yet able to access banks and larger scale institutional investors.
Effectively, microequity can be seen as seed funding and angel funding for companies in the developing world–with the exception that investing $25,000 in an existing company in the developing world really is growth capital rather than seed capital as this amount of capital can go much further and in some cases get a company past cash flow positive.
A Model for Microequity
From my vantage there seems to be a profitable (and hence scalable for greatest social impact) model that is now being developed investing in these microequity capital ranges in many parts of the world and filling the gap that sometimes exists between microloans, banks, non-profit investing funds, and institutional capital while creating tremendous social impact through sustainable job creation and economic development.
Overhead costs, deal selection, accounting transparency, and methods of obtaining the return are perhaps the most challenging obstacles to achieving a market rate of return to the investment. We talked about how all of these challenges can be overcome. There is such a huge gap here that traditional finance has not yet solved and there so many high quality opportunities to invest in while making a tremendous impact.
One suggestion centered around taking a pre-agreed upon percentage of free cash flow (FCF, or effectively net profits) that is pre-agreed upon in advance. Another suggested revolved around tying returns to a revenue multiple since EBITDAs are easier to manipulate by non-audited smaller companies.
Personally, my interest is in helping small, high potential companies based in the developing world owned primarily by local entrepreneurs access the mentorship and financial resources they need to grow into the future leading companies in their respective countries and eventually take their firms public on regional stock exchanges when run. It will likely take a couple decades to bring together the educational (human capital), governmental, and infrastructural resources needed to help small companies run by smart ambitious local entrepreneurs thrive–but the trend toward local entrepreneurial-led (often ICT-related) economic growth is already happening in Kampala, Kigali, Dar es Salaam, and Nairobi and so many other emerging markets globally from what I’ve seen.
To me, small business growth is the key to sustainably growing an economy and effectively increasing per capita incomes (otherwise known as reducing the number of people in urban and rural areas in poverty) and I believe through the right local trust networks for deal flow and local entrepreneurial support and mentorship models it is quite possible to achieve very strong returns investing today in high-potential for-profit socially responsible companies in the developing world.
Not Replacing NGOs, Non-Profits, and Public Sector
Investing in for-profit socially responsible companies in the developing world does not replace the need for a strong effective transparent public sector and does not replace the need for investments from non-profit organizations and NGOs.
Rather, it is additive to creating sustainable bottom-up economic development that creates local constituent-based growth in a way that reduces inequality of opportunity–and it happens to be where I think I can add value with my background as a venture-backed technology entrepreneur at some point.
Creating a venture capital fund that puts social return equal to financial return is something I hope to focus on someday down the road and create a scalable model that provides market-rate returns (15-20% per annum) investing in high-growth entrepreneurial ventures in the developing world run by local entrepreneurs (likely in the energy, solar, water, agricultural, low-cost medical device, software, and Internet fields).
Microequity Breakfast This Morning at Skoll
The microequity breakfast attendees this morning were:
Forrest Metz, Dev Equity, based in Oxford
Ryan Allis, iContact, based in North Carolina USA
Allan Barkat, Dualis, based in Israel
Naoko Felder-Kuzu, Socential, based in Zurich
Ron Boehm, Boehm Gladen Foundation, based in California, USA
Rob Pettit, Sumaria, based in Dar es Salaam, Tanzania
We had a great discussion around the technical structure around how to achieve market-based returns investing in for-profit socially responsible companies in the developing world.
We also talked about networks of socially responsible investors including Social Venture Network, Aspen Network for Development Entrepreneurs, and the Global Impact Investing Network and marketplaces for entrepreneurs in the developing world raising capital like BidNetwork and NeXii.
Questions & Comments?
What questions are there on this topic of microequity and investing in companies that create social good while achieving market returns or above market returns? I’d love to discuss this more!
February 3, 2010
This post will require a certain degree of vulnerability. Sometimes we build a hard shell around us when we’re going through difficult times. This is a story of personal growth.
A year ago I was sitting late at night in my Durham office at iContact wondering if I’d become a corporate sellout.
Was I trading in some of my most productive years of life to build a company I was no longer passionate about?
I had gone from being an entrepreneur to a manager. I was 24 and we had 150 employees and $20M in sales. I was dealing with purchase order forms and paid time off policies. We had achieved all the goals we had ever set out for ourselves. Where was the entrepreneurial passion?
We had gone from #20 to #2 in the market in five years and I had no idea how we’d get to #1. I thought it might be the time to start thinking about finding my replacement.
Even though we were still growing very quickly, we weren’t quite growing at the same percentages as we were before and for the first time in our company’s history we were going to have a year in which we would not double sales.
My confidence was wavering. I had made some big mistakes:
- I had waited too long to launch a stock option plan for the whole company.
- I hadn’t hired a CMO soon enough.
- I hadn’t built the right ecosystem of mentors that could help me get to the next level as a CEO.
- I had focused too much on the surrogate-family side of our culture and not enough on the performance-focused side that was needed.
- I hadn’t created values that people believed in and used every day. I could recall just four of our ten values without looking.
- I had waited too long to start a formal manager training program.
- I hadn’t truly aligned my passion for social responsibility into the ethos of the corporation.
- I hadn’t created any effective mechanism for communicating strategic direction to the company and we had a lot of confusion as to what our focus was and operating choices were being made with different assumptions as to direction.
And these were just the mistakes I knew about!
Was I Right for the Job?
As I sat there in May 2009 I wrote in my journal “I’m not sure I’m the right person anymore to lead the company into this next stage of growth. We need to make some changes to keep the growth and hit our goals. Scary to think about. Terrible to have lost some of my confidence.” I wrote an email to our CFO on May 20th thinking about succession planning for me.
I wasn’t sure whether we should try to get acquired or keep the faith that we’d get to the $60M-$70M in annual revenue needed to go public and stay on track for the 2012 IPO. At certain points I lost the faith.
Finally in July we got the CMO we wanted. And things were looking way up by the end of the summer when we got an investment term sheet with a nine figure PMV. Wow!
But then came October. In the same week my business partner got cancer (he is now doing well!), my mom started having worsening chronic arm pain (she is now doing better), and a company that was looking to acquire us told us they weren’t going forward. I guess they say that difficult times are the foundry from which greatness is cast. But it’s sure not fun being the molten iron!
Through that baptismal fire I came to a critical understanding of self and what I needed to do to align what I love with what I do–something I’ve been preaching atop the mountain for five years in speeches but only half-heartedly living. It helped me discover my authentic self. It helped me find my Csikszentmihalyian flow.
Motivated More Than Ever
So I sit here tonight in my home in Chapel Hill motivated more than ever. iContact is now at a $34M revenue run-rate and growing that by more than $1M each month. We will hire more than 50 new team members in 2010. We had our first ever post-investment EBITDA positive month in December(!!!). We’re well on our way to fulfilling our dream of “building a great sustainable company in NC for our customers, employees, and community.” And we’ve got a plan to go from #2 to #1. We have a plan to win.
I no longer question whether I’m a corporate sellout putting in my time. I’m aligned, I’m focused. I’m learning. I’m surrounded by amazing people every day who know how to do what they do so much better than I ever could.
What I Changed?
So what did I do? Three things (and I’m still working on fully implementing them)…
- I worked to align my long term life mission with what I do everyday today. My life mission, the one that’s been on my bedroom wall since May 2007, is to “be a leader of our generation as we work to end extreme poverty in our lifetimes.” While I was learning a lot about leadership and management and being paid to do it, I was somewhat unclear how building a SaaS company aligned fully with a passionate desire to end extreme poverty in the developing world over the next fifty years. The incessant question in my head was whether I’d be better off finding my replacement and either applying to the Kennedy School of Government or moving to Africa to invest in entrepreneurs there. I learned a lot about the integrated 1/1/1 corporate philanthropy model of Salesforce.com and wanted to see if we could do that at iContact. On January 8th, 2010 we launched an expanded CSR model, what we call the 4-1s Corporate Social Responsibility Model, at iContact in which we take 1% of equity, 1% of product, 1% of employee time, and 1% of payroll and invest it in local and global non-profit organizations. Since we’ve expanded this CSR program I’ve been able to see the tangible and immediate connection between my passion for social responsibility and what I do going to work every day. In 2009 iContact contributed $109,000 to 63 different 501(c)(3)s and in 2010 we’ll reach $150,000. But it’s not just money anymore. Now, each of our employees has the opportunity to be paid to take 1% of their time (2.5 days off from work) each year to do community service during business hours, which we’re tracking through VolunteerForce. While we’ve got lots of work to do to improve it, the model has real impact and tangible value for us and the community and it’s significantly helped me to a much greater degree see the meaning behind what we do everyday. I love it!
- We changed our company values at iContact. I realized in July of last year that we had ten “Corporate Values” but I could only remember four without reading the sheet. At an EO entrepreneurial exec ed program at MIT in June I learned you should never have more values than you can remember and that to be worthy of being a company value you’d have to be willing to let someone go if they didn’t live up to it. Our values fit neither requirement. In December at our two day Senior Leadership Team (SLT) offsite in Chapel Hill we came up with WOWME. WOWME stands for 1) Wow the Customer 2) Operate with Urgency 3) Without Mediocrity 4) Make a Positive Wake and 5) Engage as an Owner. We launched these values last month at iContact and now every SLT member knows them by heart and we’re working toward all managers using them during every performance and coaching discussion. We will hire and fire by these values, live up to them, and hold each other accountable to them. They’ve even inspired me to pick up my game and get it in gear. I love it!
- I let go of control. The best thing I’ve ever done for the growth of iContact is let go of control (and I’m still working on this skill). We have a six person Senior Leadership Team at iContact that can all do their jobs much much better than I can. We now have a thirteen person Leadership Team underneath them all of whom have more business experience than I do. When I realized that my job was not to ensure they did their jobs the right way but rather to enable them to do their jobs and hold them accountable for the results, my world shifted. I’m still learning in this area, but this single realization is enabling me to scale. I now focus on 1) people 2) strategy 3) culture 4) investment. Each time we get to a new stage in our company’s growth ($100k, $1M, $5M, $10M, $25M) I have to reinvent myself and my job description. I love it!
And here are some other life changes that are less critical to helping me align what I do with what I love, but are still fun to share…
- I made an equity investment in an African company. On January 4th I became a 10% owner of Village Energy Ltd. of Kampala Uganda. For four years I’ve been personally making contributions to non-profit organizations focused on ending global poverty. My philosophy has changed on economic development over the past year. Today I believe that while effectively monitored bilateral aid is an important component of ending extreme poverty and emergency humanitarian aid is morally and critically necessary in many locations, an investment in a local entrepreneur in Africa will have much greater long term impact in terms of job creation, tax revenue base, and constituent-focused democratic institution building. I was very excited to invest in Village Energy which is bringing a $60 solar panel powered LED lighting solution to rural village homes through a microfinance and franchise distribution model for $3-$4 per month per home. The product is a substitute good for kerosene which often costs $5 to $6 per month, causes lung inhalation problems and often burns down the thatch houses. I hope this $15,000 investment turns out to have much greater social impact than a $15,000 contribution. There is SO much opportunity to invest in Africa and so many entrepreneurs and companies poised for growth. And there is a huge gap between the countless MFIs that loan out $50 to $1000 and the Acumen Fund which invests $50k to $250k. Ten years from now I dream of running a socially responsible venture capital firm on the African continent. The challenge will be finding a scalable model of investing $5000 to $50,000 at a time. I think it can be done. I know the pipeline is there.
- We started a new entrepreneurial division of Virante. Virante is a 11 person company downstairs in the iContact building that I started as “Virante Design & Development” in 2000 that is now run by CEO Malcolm Young. I won’t say much about this early stage effort now because the team is still acquiring all the related domain names and IP, but it’s a socially responsible ecommerce play that I’m extremely excited about. Fortunately we’ve already got the team to make it happen and it won’t take much time. With the help of the Virante team and a 17 year old intern Aneesh that comes in each Wednesday they’re making it happen. Here I must quote my new New York friend Kim Scheinberg, “Starting a company is like having a baby. By far the most enjoyable part is the idea conception phase.”
- I followed my passion for writing and started the next book. This post is the beginning of book #2. My plan–one 5 page blog post per week that by the end of 2010 will be a ready to become a book. The title–”Dare Mighty Things: How Entrepreneurs & Social Entrepreneurs Are Changing the World.”
I have had two wristbands on my wrist since November. The first one says “Make Poverty History.” The second, “$100M in 2012.”
Thank you to everyone who has supported me through this endeavor and to all who are with us in this journey.
Here we go…
Thoughts, comments, suggestions??? Feedback is the breakfast of champions!
June 23, 2007
We’re hiring at iContact. We currently have 11 open positions and 14 open jobs at iContact. If you are interested in any of these positions please email jobs[at]icontact.com with a resume and cover letter. If you know someone who might be interested, please ask them to email jobs[at]icontact.com.
iContact is a four-year old venture-backed company based in Durham, NC, that provides email marketing and online communications software. iContact is only 4 years old and is doing extremely well. It has over 70 employees and has strong recurring stream of revenues. The company already has an effective lead generation system, a robust sales pipeline, over 16,000 customers, and many blue chip companies as reference-able clients. iContact has positioned itself as the #2 player in the industry and consistently takes clients away from the big vendors. Now, we need to continue to add world-class individuals to the team as we focus on becoming the world leader in email marketing and online communications software.
Positions will be headquartered in the Durham/Research Triangle Park area of North Carolina. Relocation is available for the right candidates. This is an excellent opportunity to get in early at a successful company that is positioned for a very big and profitable exit. The iContact product is the leading email marketing and online communications platform used by over 16,000 companies worldwide ranging from small businesses to blue chip clients like International Paper, Ford, Bank of America, Super 8 Motel, Symantec, Re/Max, United Colors of Benetton, Nissan, and LG Electronics. iContact 4.0, designed for the SMB market and iContact Enterprise, designed for mid-sized to large organizations, are both available at www.icontact.com. iContact was named one of the Best Places to Work in the Triangle by the Triangle Business Journal in 2007.
Seeking a Product Manager to plan, analyze, and execute new releases of iContact email marketing and communication software. The ideal candidate will take vision and input from The Board of Directors, team members, and customers and synthesize them to build our product, project, and iteration plans. Excellent verbal and written communication skills and a bachelor’s degree and 3-5 years experience are required. Candidates with previous project management skills and experience with Scrum will be strongly preferred. Requirements include: experience developing and launching consumer technology products, intuitive sense for product usability and design—ability to think through every aspect of the user experience and general understanding of web technologies (e.g. AJAX, CSS, MySQL), how they’re implemented/served, and how they fit together.
Seeking several Account Managers to work as part of the Sales Department, selling iContact Enterprise to organizations that desire a world-class E-marketing program. The individual will begin work in an intensive training program and be initially assigned to the Lead Generation team. After completing training successfully and generating leads at an acceptable rate, the individual will be eligible to move onto the Inside Sales team. The ideal candidate will possess a 4-year technical degree and 1-2 years technical, quota-based sales experience, achieving above quota.
Web Application Developer
Experience with web based application development, object-oriented design and programming, design patterns, finding and fixing bugs, test-driven development, and working in teams. Computer Science or related degree. Additional desired skills: PHP, MySQL, Linux, database indexing and optimization, and familiarity with agile development methods.
Customer Support Representatives
Experience responding to support issues, answering questions via phone, providing support via live chat, and assisting customers with use of web based software products. Proficiency with computers, experience with troubleshooting, providing technical support, and knowledge of HTML are all required. Experience with email newsletter, phone queue system, support ticketing systems or live chat systems a plus.
HelpDesk Support Specialists
One to three years experience in IT support, LAN, network printing, Windows XP Professional on the desktop and laptop is needed. Experience in Linux desktop is a plus. Some college or a 4 year degree in a technical field is preferred. Desired skills: Windows XP, networking protocols-TCP/IP or DHCP, networking hardware-patching a cube, working with switching, network printers, laptops, desktops, help desk tickets, Microsoft Office, Open Office, and Firefox.
BA in Accounting or equivalent. Two to six years of experience with payables and receivables, general ledger, payroll support and wire transfers supporting company’s finance team. High level of proficiency using MS Office programs, especially Excel. Knowledge of Quick Books or Sage Accounting software is an added advantage.
Vice President of Customer Service
Manages a 27 person department that may scale to 55 persons in 2008 and 90 or more in 2009. Proven ability to reduce phone call abandonment rate from 8% to 2% and reduce ticket response time. Ensures quality and consistency of support representative training programs. Establish a customer satisfaction score system and manage all product documentation including user guide, KB, and tutorial videos. Requires a BS or BA degree and 10-15 years of business experience. A Masters in Business is preferred or equivalent experience. Ability to build training and support materials for resellers.
Online Advertising Manager
Seeking an experienced A-Level player to manage and scale our lead generation and customer acquisition efforts through online advertising. Person will be extremely experienced with driving customer acquisition through online media buying. Experience utilizing an ad serving engine like Atlas, DoubleClick, Zedo, or a similar tool is required. Responsibility for coordinating all non-CPC online advertising and scaling customer acquisition from 1600 to 10000 customers per month. Main responsibilities include managing creation of ads, testing creative and landing pages, CPM media buys, negotiating and executing deals, campaign execution and optimization, determining competitors ad locations, and utilizing an ad serving engine. Requires degree and 2 to 5 years of successful experience managing and scaling online media buys in a fast-growth environment. Person reports directly to the Vice President of Marketing.
Affiliate Advertising Manager
Seeking an experienced A-Level player to manage and scale our lead generation and customer acquisition effort through CPA and affiliate advertising. Person will be extremely experienced with driving customer acquisition through affiliate networks, large affiliate recruiting, and established CPA-based deals. BA with 2 to 5 years of successful experience managing and scaling successful CPA advertising buys. The person will report directly to the Vice President of Marketing. Will have the responsibility for coordinating all of the affiliate and CPA customer acquisition and helping scale our customer acquisition from 1500 to 10000 customers per month. Experience with managing creation and testing of effective ads, affiliate recruiting, contract negotiation, business development, deal negotiation, campaign execution, customer acquisition cost and lifetime value calculation, return evaluation, and campaign scaling is essential. We are seeking an individual that has managed an affiliate program on a major network that had monthly commission payout of at least $100,000 and recruited at least 2000 affiliates.
Three to five years of experience working on web-based applications and managing the usability aspects of development projects. Strong interpersonal and negotiating skills and user interface design skills. Proficiency in statistics, data analysis,and survey design. Ability to make strategic and tactical design recommendations based on results from usability tests and customer surveys. An advanced degree in Human Factors, Cognitive Science or a related discipline is preferred. Additional desired skills include (X)HTML, knowledge of Agile development techniques, exposure to design and prototyping tools such as Photoshop, love for mentoring others in usability best practices, and familiarity with Section 508 accessibility requirements.
Senior Front-End Engineer
For More Information
If you are interested and/or would like more information, please send resume with cover letter to jobs[at]icontact.com. If we determine you to be a qualified candidate we may send a questionnaire or contact you to schedule either an in-person interview or teleconference interview. Additional information on the company and software can be found at www.icontact.com.