Discussion about entrepreneurship

'

MANAGEMENT

"Citize.ns and businesses are creating a 'solution economy' that blends market forces and alt ruism to get good things done . .. Watch out .

T his book may inspire you to join t he revolut ion!"

-WALTER ISAACSON , President and CEO, Aspen Institute; autho r, Steve f?bs

"Today the world's biggest problems are the world's biggest m arket opportunities. Want to become a billionaire? Solve a billio n-person problem.

The Solution Revolution shows you how."

-PETER H. DIAMANDIS, Chairman and CEO, XPRIZE Foundation; Chairman, Singularity University;

coauthor, A bundance: Th e Future Is Better Than You Think

"The Solution Revolu tion explo res how t he intersections of the secto rs can unlo ck t he potential we'll need to face the realit ies of t he t went y-first century."

- JENNIFER PAHLKA, Deputy US CTO; founder and Executive Director, Code for America

"Th e Solution Revolution is a wise reminder that global problems should n' t be left to government alone to solve .. . Read this book and join to day's 'solution economy."'

-JOHN MACKEY, co-CEO and cofounder, Whole Foods Market; coauthor, Conscious Ca pitalism:

Liberating the Heroic Spirit of Business

"With a global populat ion ap proaching nine billion and governments so indebted t hat their only answer is to beggar succeeding generatio ns, the current pat h is

clearly unsustainable. Eggers and Macmillan seek a bet ter way."

- THE RIGHT HONOURABLE PAUL MARTIN, for mer Prime Minister of Canada

"Eggers and Macmillan vivid ly describe creative solutions t hat break the boundaries between the public and private sectors and civil society.''

I

-GEOFF MULGAN , CEO, Nest a; author, The Loc ust and the Bee: Preda tors and Creators in Ca pitalism's Future

"Read this book if you want to understand how the 'solution revolution' will create a t rillio n- dollar m arket fo r social good by unloc,king t he value of underutilized

resources in ways and on a scale never possible before."

-RACHEL BOTSMAN , coautho r, What's Mine Is Yours: Th e Rise of Collabora tive Co nsump tion

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REV OL UTION HOW BUSIN.ESS , GOVERNMENT,

and SOCIAL ENTERPRISES Are Teaming Up

to Solve Society's Toughest Problems

WILLIAM D. EGGERS & PAUL MACMILLAN , HARVARD BUSINESS REVIEW PRESS

168 The Solution Revolution

fication-empower impact exchanges by providing investors with independent

evaluations.

• The innovative use of metrics enables pay-for-success exchanges, with goals

based on historical data and payments based on data-supported outcomes.

• Social-impact bonds spread the risk of investing in social projects.

• Social investment finance intermediaries connect social-impact investors with

social sector organizations in need of funding.

EXCHANGE INNOVATORS

• Kaggle: This platform organizes competitions for data problems, in which the

hosts post a data set, and the most accurate predictive model wins.

• Kiva: One of the largest microlenders anywhere, the organization enables any-

one with internet access to fund ventures around the world.

• Skillshare, School of Everything, and TeachersPayTeachers use peer- to-peer

exchanges to teach and train peopl e over the internet.

• Mission Marke ts: This new stock exchange offers shares worth more than $336

million in double- and triple-bottom-line companies.

• Trilinc Global: The firm's $1.25 billion Global Impact Fund connects "main

street" retail investors to social entrepreneurs.

• Challenge.gov: US federal agencies can use this online platform for prizes and

challenges.

• Big Society Capit al (BSC): This UK government-sponsored, privately run social

investment fund provides affordable financing and advice to social enterprises.

QU ESTIONS FOR THOUGHT

Which of these varieties of exchange have you observed in action? What type of or-

ganization operated the exchange, and did it meet the desired goal? In light of the

examples shared here, is there anything you would change about the exchange?

SIX

The Ecosystems Converging around big, hairy, audacious problems

In traditional business thinking, a company discovers an unmet de-

mand and brings a solution to market. But what if there were no de-

mand? And no market? And your potential customers were literally

dirt p oor? Traditional thinking wo uld tell you to give up.

In the solution economy, the w i nning ap p roach is to capitalize on your role in a broader ecosystem. If a problem exists, the answer is to create an environment in which the so lution can o rganically, sustain-

ably, profitably be brought to bear-even if there is no market demand

in the traditional sense. Sound impossible? Well, that's exactly what

Unilever did in India to address a critical p ublic sanitation problem.

How the company did it demonstrates the role that ecosystems play

in the solution revolution.

Sometimes the best solution is as simple as a bar of soap. Diar-

rhea kills 1.5 million children a year worldwid e, making it the second-

most common cause of death for children under five . Yet the remedy

has been known for centuries: basic sanitation practices such as hand

washing c ut the ris k of contracting the disease in half. The u seful -

ness of soap in this regard was und ers tood as far back as in ancient

Babylon. 1

170 The Solution Revolution

Remarkably, though, perhaps a billion of the world's poorest in -

habitants do without this most basic of essentials. For many, soap

doesn't fit their budget (about 1.2 billion people earn less than $1 a

day), and many others are unaware of soap's sanitizing properties and

critical role in hygiene.2

These consumers occupy what business strategists C. K. Prahalad

and Stuart L. Hart call the bottom, or base, of the global economic

pyramid. 3 As discussed earlier, conventional businesses historically

neglected the needs of those at the base of the pyramid, unless the

companies were sellin g supplies to humanitarian relief organizations .

It was considered impossible to serve remote, impoverished regions

without taking a sharp financial loss . In many cases, the basic market

features wealthier societies take for granted-grocery stores, pharma-

cies, and other retail outlets for hygiene products-simply don't exist.

In addition, the specia l needs of this consumer population had never

been researched by the marketing department.

Into this market void stepped HUL, Unilever's subsidiary in In-

dia (hereafter known simp ly as Unilever). Over the years, Unilever

has become one of the most sophisticated companies in the world in

selling to the poor, emplo ying a host of strategies in many countries

to reach this very hard- to -reach market segment. In the case of pro -

viding soap in India's rural villages, Uni lever recognized a blue-ocean

opportunity, that is, an opportunity to serve a huge, untapped mar-

ket. In 2000, the company revamped its business strategy to accom-

modate this opportunity. To reach the potential market of more than

600 million low-income Indians, Unilever would have to create an

entire ecosystem. Because its product wou ld address a serious public

health issue, it was able to partner with NGOs, banks, and schoo ls

to create a market for cleaning products in rural India-while lifting

women from poverty with microloans and jobs, improving public

health and sanitation, and enhancing public health awareness through

educational campaigns-all w hil e turning a profit.

Unilever's initiative began small, in the rural hinterlands of In-

dia, by tapping into organic networks of local female entrepreneurs.

The Ecosystems 171

The company worked with microlending institutions to open lines of

credit for these women. Once a woman could obtain a microloan to

buy Unilever soaps, she could provide this essential resource to her

entire village. She would typically charge a 7 percent markup, w hich

allowed her to pay off the loan and draw a steady income. "When my

husband left me I h ad nothing but my daughters," said Rojamma, one

of the new entrepreneurs. "Now everyone knows me. I am someone."4

Unilever's program equipped women like Rojamma with a job,

met a basic sanitation need, and gave Unilever access to a remote re-

gion it couldn't affordably reach otherwise. What began with seven-

teen women expanded within a decade to forty-five thousand sales-

women, who in turn reach ed more than three million households.

Similar programs are flourishing for Unilever in Sri Lanka, Bangla-

desh, and some African nations.5

Prahalad and Hart contend that multinational corporations "must

build an organizational infrastructure to address opportunity at the

bottom of the pyramid." Unilever put this insight into practice. In

addition to a specially tailored, nontraditional sales force, Unilever

als o created a new specially tailored soap brand, Wheel. To protect

the environment, the company made Wheel with a lower oil content,

because the poor often wash in rivers. In addition, Wheel is sold in

small quantities at very low prices, because customers cannot afford

to buy more than a few days' worth at a time. Unilever "decentral-

ized the production, marketing, and distribution of the product to

levera ge the abundant labor pool in rural India," exp lain Prahalad

and Hart.6

To market the products, Unilever's Lifebuoy brand sponsored

Swasthya C hetna (Health Awakening), at the time the world's larg-

est private hygiene education program. 7 In 2008, a Unilever- backed

NGO sponsored the first of a now annual Global Hand Washing Day

in more than a hundred countries and coordinated with more than

fifty organizations in nineteen countries for the event.8 Schoolchildren

learned soap jingles and made hand-washing pledges. Many continue

to do so every morning of the school year.

172 The Solution Revolution

The Swasthya Ch etna program bega n w ith a goa l of educating

20 p ercent of Indi a's population-200 milli o n Indians-to wash their

hands after go ing to the bathroom. About 150 outreach teams spea k-

ing seve n dial ects spent two years travelling to eightee n thou sand vil-

lages, wh ere t he team members shared lessons, posters, and literature

on sanitation. To emphasize the m essage, they revisited each village,

applauding good hygiene practices and offering additional in struction

as needed.

Their visits often includ ed dramatic p erforman ces, hand -washing

d emonstratio ns, and the introduction of the co ncep t of germs. Chil-

dren rubbed their hands w ith powd er, which simulated dirt and ge rms,

and the kid s th en wash ed it off using plain water. But und er a black

light, their hands still sh owed traces of the p owder, w hich glowed un-

der the light. T hey then repea ted the experiment, this time washing

w ith soap. T h e glow was now gone, dispelling the myth that clean-

looking hand s are clea n hand s. The Swasth ya C hetna marketing cam- paign cost U nilever o nly $2.7 million.

U nil ever's research partners in the academic and scientifi c com -

munity tested the effectiveness of these campaigns, even planting se n-

sors insid e bars of soap to see how often control groups washed . They

also tested the effectiveness of hand was hing itself, finding a 48 p er-

cent redu cti o n in diarrhea cases and a 46 percent red uction in eye in-

fections amo ng p articipants.9

About six thou sa nd children worldwide- most of th em under

th e age of fi ve-die from diarrhea each d ay. Unilever is well aware

that its work helps to reduce this suffering.10 Even so, says U ni lever's

Harpreet-Sin gh Tibb, the effort is still a business undertak in g.

"Swas thya C hetna is not about p hi lanthropy," he says . " It's a mar-

keting pro gram with social benefits. We recognize that the h ealth of our

business is totally interconnected w ith the health of th e communities

we serve." 11 The bu siness challenge was imm ense. Unilever had to sell

soap to people w ho didn't know they needed it, who couldn't afford

it, and wh o h ad nowhere to buy it. To su cceed, Unilever h ad to ch ange

The Ecosystems 173

its bu siness model dras tica ll y to adjust to local customs and market

chall enges and to en gage w ith a multitude of nontraditional p artners.

It succeeded by thinking beyo nd the simple seller-buyer p aradigm

and creating an entire ecosystem that enabled supply and encouraged

demand. NGOs contributed their cultural expertis e to the pro gram

design and gave Unilever's efforts legitimacy. Scientists researched the

effectiveness of public health campaigns. Banks and NGO s provided

the microloans. Local village entrepren eurs be came the sales and mar-

ketin g engine. Government age ncies introduced Unilever's programs

to schools and sponsored public health m essages. In return, Unile-

ver delivered engaging h ealth instru ction at a scale the government

wouldn 't have provided otherwise, and the firm left a lasting examp le

that could be used to hone futur e public edu ca tion ca mpaigns.

In building this soluti on -econom y ecosys tem, Unilever also

p lanted the seeds for future wavem akers. " It is not on ly my own pros-

perity th at means so mu ch to me," says Feroza, an entrepreneur from

Joyeeta, Unilever's sister p roject in Bangladesh. "People get insp ira-

tio n from me. They say, 'If Feroza can do it, why not m e ?' I' m mor e than a representative o f Unileve r; I'm an ambassador of life, hope and

dreams ." 12

From Silos and Sectors to Ecosystems

In the solution econ om y, vario us factors co mbine to create a new prob lem-solving environm ent. New organizational models, new

currencies, n ew applications of techno logy, and a n ew generati o n of

wavem akers are attacking some of society's toughest challenges. It's an

econo my built on more than mo ney, w h ere the old definitions arou nd

comm erce, profit, nonprofit versus for-profit, and public value are

bei ng challenged regu larly. Breaking throu gh the traditional ways of

thinking allows for the developm ent of so luti o n ecosystem s.

Wavemakers begin by seeing a p ro blem (such as preventable

deaths from poor sanitation) and ask, "Wh at would it look lik e to

17 4 The Solution Revolution

really make a difference? What can I d o to get there?" They form rela-

tionships to work together effectively, regardless of their specific sec-

tors, silos, and roles . Why s houldn't a multi-billion-dollar company

take the lead in educating rural Indians about sanitation?

The rigid silos of traditional industry, government-and even

many foundations- run directly against the disruptive thinking of the

solution economy. Rath er than navigating fragmented hierarchies to

advance an agenda, social entrepreneurs and organi zation "intrapre-

neurs" begin with the problem itself. Why can't an inventor better

known for robotic limb s and souped-up scooters create a device that

purifies water, as Dean Kamen did (see chapter 1), and enlist a com -

pany like Coca-Cola to distribute it throughout developing countries?

A core issue or obj ective, such as fightin g malaria or revolution-

izin g high er education, becomes the center of an ecosystem. As con -

nected citizens share their concerns about, and interes t in , the topic

(in a conversation now made easier with the advent of social media

and the internet), m arket demand grows and enterprising contributors

converge to meet the gap in the market.

In biology, ecosystems represent a community of living organ- ism s interacting as a system. Likewise in soluti on ecosystems, p artner

organizations gain when o ne organization evolves its distinct role to

complement the other's contributions. (Both public schools and Uni-

leve r h ad a shared interest in getting kids to was h their hand s, but

the traditi onal roles of these two players would never link them up.)

Together, vario us groups can move toward their goal much more pro-

du ctively than if each group pursued it separately. Th ese d ynami cs are

replicated across the ecosystem. The larger the mixture of players, the

more opportunities for p artnerships that serve all parties.13

Consider cl.li ght, the scrappy start-up foc used on a huge, large ly

unknown problem: access to li ghting in the home. The company tar-

ge ts the one in four people globally who live without electricity. Al-

thou gh cl.li ght had some innovative d esigns that cau ght the interes t of

the Omidyar Network, enormou s distribution ch allen ges stood be-

tween the promis ing design and the billions of p eople wh o needed it.

Th e Ecosystems 175

The ind ividu als most in need were scattered across remote regions at th e base of the pyramid .

To address this concern, the Omidyar Network drew o n its tight

network of international development organi zati o ns. At an Omidyar

Network p arty, the CEO of cl.li ght was introduced to a representative

of BRAC, the largest, most m ature service provid er in Bangladesh .

Ten d ays later, th e two companies were meeting in Dakar, negotiating

a pil ot project to bring cl .light's produ cts to five BRAC communities.

"BRAC has unparalleled distribution, so th e impact on volume

was incredible," says Susan Phillips of the Omid yar Network. "BRAC

is in 110 countries. The potential for collaboration within the network

can be staggerin g." 14 Today, cl.light has reached ten million people in

more than thirty countries.15

Some ecosystems ben efit fr om a backbon e organi zation that serves

as a central organizer, a so urce of accountabi lity, and a co nvener. In

som e ecosys tems, this role is played by a "connector" compa ny and

its platform. In the business world, this is best illustrated by p latforms such as eBay or Amazon.com, which create s imple market conditions

and a user culture that faci litates interactions betwee n buyers, sell ers,

and package shippers. In the social sector, the connector ro le is taking shape throu gh cl ever public-priva te p artnerships where th ere is often

an integrato r pu lling the ecosystem to gether. As will be di sc ussed later

in thi s chapter, th e role has been pioneered by large acad emic institu -

tions like MIT and Harvard in the on line ed ucation mark et and by

A shoka in the affordabl e ho using ecosystem.

Anoth er example is what the G lo bal Alliance for Vaccin es and Im-

muni zati ons (GAV!) has done to increase access to immuni zations in

the world 's p oorest countries. In 2000, a pl ethora of new technolo- gies and medi cines was coming o ut or already avai lable for children

in the Wes t, but other regio ns-where the medical innovations were

need ed most-were relative deserts. The discrepa ncy was a textbook

market fa ilu re. Not until the World H ealth Organization, UNI CEF,

academics, pharmaceutical companies, and funders converged at the

World Econom ic Forum in Davos was th e need ad dressed and ground

17 6 The Solution Revo lution

broken o n a solution space. GAVI is that space, and its achievements

are the sum of its p artners. Like a fi eld -sp ecifi c version of Davos,

GAVI brings together under one roof the vaccine industry and vari-

ous NGOs, d onor co untries, and developing countries to reshape the

vaccine market. By pooli ng demand from developin g co untri es for

vaccines and matching it with reliabl e, long-term financing, GAVI de-

livers mass ive impact-370 million additional children have been im-

munized, preventing 5.5 million future d eaths with its support-with-

out any of its own boots on the ground. 16 It simply connects existing major players.

M any of the market innovators op era ting in develop ing countries

must create an ecosystem to serve previ ously unm et needs. Take Husk

Power Systems, whose mission is to electrify th e poorest villages in

India by building radically affordable, thirty-kilowatt power plants.

Hu sk's biggest challenge is not necessari ly building power plants

cheap en o ugh to serve a population w hose annual salary is less than

$200, but th e lack of low-cos t suppliers to build the plants and main-

tain the systems in these areas. This meant that Husk also has to invest

in metering, a sales force, electrical engineers, training, and edu ca tion.

"Why is it so hard for many of these entreprene urs?" asks Sasha

Dichter of Acumen, one of Hu sk's investors. "It's becau se t hey are

literally creating markets. T here often is no market. N o ecosystem to

draw from. They're building it from scratch." 17

Much like the uniqu e, converging causes of a problem, th e result-

ing probl em-solving ecosystem emerges and expands through its own

distinct process. Certain versatile eleme nts are adapted, technologies

are leveraged, and currencies gain new context. Existing exchanges and

business mod els may find fresh relevance in the budding ecosystem,

and participants, often playing nontraditional roles, contribute to the

fl ow of bo th resources and ideas, allowing new self-s ustaining solu-

tion markets to thrive. In the examples that fo llow, we will show how

the foundati ona l elements of the solution economy dis cussed fro m

chapters 1 throu gh 5 can be traced across ecosystems.

The Ecosystems 177

Revolutionizing Education: An Innovation Ecosystem

Disruptive innovations force entire industries to adapt or become ob-

solete. Netflix adapted to the digital revolu tion; Blockbuster didn' t.

IBM ad apted; Wang didn 't. Apple thri ved in the era of digital images;

Kodak d isappeared. UPS and FedEx have boomed along with online

shopp ing, w hile many postal services, with their monop olies on mail,

stru ggle. Ind eed, the very insu latio n provided by monopoly status,

tradition ally viewed as a boon, h as bee n a ch allenge to pu blic institu-

tions that must adapt to changing ecosystems.

Nowhere is this more the case than in education. While many

public sch ools are still locked in a stud ent-teach er, brick-and -mortar

mind-set, new p articipa nts in the ed ucation marketplace are exhibit-

in g all t he characteri stics of an emerging ecosystem. A h orde of new

entrants is scratchi ng at the margins, finding niches and refining the

offerin gs (figure 6-1). Some rise to pro minence, and others die out,

their best id eas swiped and incorporated into st ronger competitors.

Far-reaching sh ifts in the education ecosystem are radically changing

hi gh er education, private schools, on line learnin g, adult learning, and

ind eed the very idea of wh at it means to be a teacher, a student, or a

school.

For s tud ents of all ages, ed ucation already has evolved signifi-

cantly. Now anyone w ith an internet connection can learn, with top-

quality lessons available 24/7. Whether it's taking a refresher on linear

algebra through Khan Academy; mastering the basics of computer

programming with CodeAcademy; or pursuing actual course credit

from online, for-profit institutions such as StraighterLine or the Uni-

vers ity of Phoenix, milli ons now draw fro m a rich array of educa-

tional resou rces. Academic Earth, Udemy, Coursera, and more than

250 other institutions n ow offer open courseware, granting free access

to acclaimed university courses. The resources n ow available in the

educational ecosys tem allow teach ers and students to p ersonalize edu-

cation and connect in unprecedented ways.

FIGURE 6- 1

Expanding education ecosyst em

Blended learning t from Connections Educati on and K12 \ \

Customizable \

~ c urriculums from Khan

,, Academy

_,

Marketable skills

H from CodeAcad emy and course credits ' fro m Straighterline ,

Fig ure key

~ Science

D Advancement p Communication * Savings

...

-

Freemium models, ~ .,,.. EdX, Coursera, and

Udacity

-- - "School-in-a-box" franc hises like

Bridge ~ Intern ational Academies

.... ' \

Soc ial, mobile, and cloud technology, e.g., Skype in th e Classroom, EdModo, and Betterlesson

-- Ad aptive learning rl through DreamBox and Kn ewto n Platform s, e.g., Skill share, OpenStudy, and WizlQ, to

- ..._ exchang e and reinforce knowledge

The Ecosystems 1 79

Co nsid er an internet-equipp ed sixteen -year-old. P erh ap s her ow n

high school doesn't o ffer a macroeconomics course she wants to take.

She can study from home in a virtu al sch ool fo r credit during her off

hou rs. O r sh e can t ake a free macroeco nomics course from EdX, join-

ing 100 million others w ho have taken courses fro m MIT, H arvard,

and a growing number of o ther elite universities online. A t the end of

the yea r, if she takes an AP macroeconomics exam and scores well, sh e

can place out of th e co urse in co llege o r place into a mo re advanced . .

economi cs semmar.

The imp act on o nline learning is magnifi ed w hen multipl e tools

are used in combination . Since the macroecono mics exa m is sure to

have problem sets, o ur sixteen -year-old w ould -be economist can gain

an advantage if sh e pract ices the p roblems on the website Drea mB ox,

w hich adap ts to her resp onses by altering the level of difficulty and

th e typ e of hints given. And just because no o ne in her schoo l is tak -

ing the class doesn' t mean it has to be a solitary activity. She can find

stud y groups and p eer- to-p eer support via platforms such as Students

of Fortune and Wi z IQ, si nce aft er all, the bes t perso n t o teach you

s omething is often so meon e w h o just learned it. And best of all, it

do esn ' t matter whether this sixteen -year-old lives in an U pper West

Side ap artment, an urban slum in Lah ore, o r a hut in the Himala-

yas . Internet access now means edu cation al access-fo r students o f

all ages.

Educators call the fas t -grow ing co mbination of online and class -

room resources blended learning. T h e 2011 Sloan Survey of O nline

Learning concluded th at more than 6 mill ion students too k at leas t

on e web - based class in the fa ll 201 0 semester, an increase of 560,000

from the year before. 18 Tom Vand er Ark, CEO of Open E d ucatio n

Solutio ns, p redicts that at leas t two-thi rds of US students will do m ost

of their learning onlin e by 2020.

Whi le som e teachers in traditi on al scho ols may be fe arfu l o f wh at

blend ed learning means for them, m any recogni ze that these new too ls

can radica lly increase t he quality of edu cation a teacher can deliver and

180 The Solution Revolu tion

th at m any o f th ese n ew resources are design ed sp ecificall y fo r teach -

ers. The distributio n of class grades, clea nly d isp layed o n a graph, can

indicate if an exam m ay h ave been too ch alle nging o r too easy, for ex-

ample. Teach ers ca n swap tips an d lesson p la ns on sites such as Better-

L esson o r TeachersPayTeach ers. A nd as exp.lained in chapte r 2, so me

tech -savvy teach ers so e mbrace b lend ed lea rni ng t hat t hey teach w ith

a fli pp ed-classroom m entality.

W hat if a teac h er is con cern ed th at part o f a student's p aper seems

unch aracteristic of his o r her w ritin g sty le ? A teach er can run the es-

say th rou gh a software program like Turni tin o r SafeAssign th at pic ks

u p evid ence o f pl agiarism; su ch software is an essen tial too l in an era

o f n ear-unl im ited o nline info rm atio n. Instead of sc rawling "See m e

after c lass" in red ink o n returned work , teachers can con tact students

and p arents throu gh p latform s su ch as Edmo d o . As these examples

show, educatio nal support is b ei n g d eveloped fo r teach ers as well as

stud ents .

. Rapid techno log ical ad van ces in education are sh aking up th e sys -

tem . For ins tance, b rick-and - m ortar schools o ften stru ggle to p resent

m a th and science co ursework effectively. E du ca tors have long reco g-

nized th at childre n learn in a variety of sty les , p articularly in these

su b jects. U nfo r t unately, one bad experi en ce in grade school may lead

to las ti ng resistance to th ese top ics, creating a per manent disadvan-

tage in a jo b m arket in w hich scien ce and math m ajors are in hi gh

d em an d . To day, h owever, the educatio n ecosys t em offers numerou s

educational optio ns to fin d the ri gh t fit for each stud ent, p erson alizing the experience. Checkpoints built into certa in onli ne courses ind icate

h ow th e m aterial is b eing absorbed in real time or wh at n eeds to b e

explained differently. In this way, a stude n t progresses o n a person-

alized learni ng pat h, at a p ace t h at m axim izes conten t m astery and

retention.

As dem o nstrated in chapter 5, adu lts too ca n gain a compe titive

ed ge o r p u rsue an i nteres t th rou gh on line lectures, fr ee co urses, and

discuss ion foru ms, in t he adult analog to blen ded learning. T h e futu re

The Ecosystems 1 81

seems to offer opportuniti es to acqu ire val uable skills that are limited

only by the ind ivid ual's curiosity, dedicat ion, a nd time.

The technological leapfrogging in develop ing countries, such as

bypassing lan dl ines in favo r of mobil e pho nes, is extending into educa-

tion as well. Areas in w h ich m ill ions lack access to traditional schools

are now drawing on on line educational resou rces. In the fi rst decade

of the twenty-first century, Asia experienced t he greatest growth in

on li ne learning. In C h ina, 10 percen t of all university learning takes

p lace o n line. Meanw h ile, o n line cl assrooms provid e a way for w omen

in Saudi A rabia to obtain an ed u catio n with out violating societal rules

against being in a classroom with male instructors.19

T he next area ripe for solutions in the education ecosystem is the

b rid gin g of the digital and physical learnin g worlds to repl icate th e ser-

end ipitous sense of community of a brick s-and- mortar school, which

a computer alon e can't provide. The tech nica l and analytical skills

learned online aren't ever y th in g; the p sychological benefits and sof t-

ski lls deve lopment of direct interaction m atter too, as most schoolchil-

dren will attest. Providing a compelling social component to the online

education experience, wh ether thro u gh m eet-up groups or team proj-

ects, w ill en cou rage broader p articipation in the ed ucation ecosystem.

Affordable Housing: An Ecosystem fo r the Base of th e Pyramid

Nearly a billion p eople live in slu ms-rou ghly half of all city dwellers

in the developing worl d . They lack access to basic san itation and share

overcrowded, ramsh ack le structu res . Beyond their genera l unpleas-

antness, slums foste r disease, sab otage education, and are vu lnerable

to fires and natu ral disas ters. G lobally, at least 100 m illi on people lack

housing altogether.20

If current tren ds continue, the numbe r of people living in slums w ill rise to 2 billion in 2030 an d 3 b illi on in 205 0.2 1 T h at 's because vir tu-

ally all the world popu lation growth will be in the cities of developing

182 The Solution Revolution

countri es, concentrated in the inform al settlements of the poor. To

suppl y shelter fo r th e 40 percent o f th e world 's p opulation that w ill

need affo rd abl e ho using by 2030 w ill require the building of 96,150

new ho usin g units eve ry day. 22

Creatin g shelter for the poorest citizens d oes n' t com e easy. Not

on ly d o these slum d we llers lack m o ney, but they also often live in a

form of shadow eco no my-which disco urages mechanisms like the

traditional thirty- year mo rtgage or even rental arrangements . "Ho us-

ing projects require many different partners, m ay no t have o ne clear

entrepreneur at the helm, often rely o n subsid y to be trul y afford able,

and do n't see a fini s hed p roduct o n the ground until many m onths o r

eve n years later, " w rites A cumen's Ad en Van N oppen .23

Safel y ho using large numbers of the urban p oo r in a radically new

way requi res multiple players to converge in an ecosystem o f fin ance,

skilled labo r, and legal und erst and ing. The first chall enge, however,

is simpl y d es igning a cheap home. Th at engineering and business feat

demanded its ow n ecosys tem of skill ed profess io nals.

To inspire the necessary collabo ration, Vij ay Govind arajan and

C hristian Sarkar, professo rs at D artmouth's Tu ck School of Busi-

ness, used an exchange model. They proposed a co ntes t: d esign a $300

house. A nd cos t w asn ' t the o nly con straint. To transform slums, the

designs need ed to be ad aptable to local conditi o ns and simpl e to con-

struct fro m ava ilabl e materials. H ardwa re and constru ction conglom-

erate In ge rsoll Rand offered prize mo ney for the best desi gns.

Govindarajan and Sarkar realized the p roject would require the

bes t mind s in business, design, archi tecture, and academia, as well as

feedback fro m business exp erts, architects, and no nprofit p ros w ho

p ossessed a rubble-level intimacy wi th the world 's s lums.

Open information fed the d es ign p rocess . As th e teams prepared

their entri es, the co ntes tants compared proposa ls o nline, and anyone

o n the internet could critique the plan s. Exp erts we re invited to de-

scrib e the o bstacles , both financial and environmental, that the design -

ers would fa ce.

The Ecosystems 183

The six winning tea ms parti cipated in a weekl o ng prototyping

workshop at Dartmo uth. O ne w inne r d esign ed a ho use that cut cos ts

through economies of scale. "We rea li zed that by a nalyzing just o ne

ho use, we were never going to achi eve the goal of $300 per ho use,"

says Eric H o fr om the Arc hitecture Co mmons team. " Becau se of the

cost of labo r, it 's just n ot p ossible. So to circumvent it, w e had to cre-

ate a co mmunity. "2 4 T his community would need to tap into the prin-

ciples of the solution revolution, including n ew fo rms of investing and

fin ance.

In thi s model, a hundred fa milies togeth er w o uld apply for $30,000 of microfin ance loans. Thus a village would in ves t in machines to build

compressed -earth bric ks and sp ecial roof tiles, two microenterp rise

p rojects that could employ vill agers w hile it created ho using fo r th em.

At D artmo uth, the Architecture Com mons team lea rned that a work -

ing p rotot ype would be custo mized fo r a trial run in H aiti, mergin g

the bes t e lements of the w innin g des igns.25

Meanw hile, Tata Group , an Ind ian company known fo r its $2,500

ca r, is testin g three desig ns fo r a $700 ho use in Wes t Bengal. The pre-

fa bri ca ted kit co nstructs a 21 5-squ are-foo t h o me that can be assembled

in a week. Tho ugh p o tentially still beyo nd th e reach of the p oorest,

the design sho uld provid e a welco me altern ative fo r the Indian middl e

and lower- m iddle classes and sh ould simpli fy th e cos t of governm ent

ho usin g. O ther architects arc o bserv ing Tata's effort closely to fi nd

elements of the d es ign th at might sca le.

The n ex t layer o f the lo w-cost ho using ecosystem is fina nce and

ad ministra ti o n. Slum dwellers often lack the legal rights to their

ho mes. P o tential build ers must cons ider actu al ow ners as w ell as the

government dep artments th at enforce buildin g codes, fight fir es, and

m ust p ro vid e shelter fo r relocated resid ents. Builders also must coor-

dinate w ith N G O s, cont racto rs, fin anciers, and o ther players, such as

academic ad visers o r voluntee r architects. F igure 6-2 shows how all

these playe rs and innovati ons co ntribute to create affordable ho using

fo r p eopl e at the base of the p y ramid in vari ou s countries.

184 The Solution Revo luti on

FIGURE 6-2

Affordable housing at the base of the pyramid

S fa The $300 house challenge f'l r crowdsourc es a design for

the base of the pyramid

S Tata Group specializes 1::1 in frugal innovation and

designs a $700 prefabricated house '

• Acumen invests in Kashf's Home Improvement Loan program in Pakistan serving the base of the pyramid

- - 1

~ #tt /

\ \

'

\ \ I

. . · ' As the ·

populatiqn ' , ·. living in slums ·

expands . .• .

iifimii Thailand's Community 1111 Organizations

/ Development Institute / convenes locals, builders,

1 and policymakers to

1 address unmet I housing needs

. . ' . ' . · ... while · ·.

· including " residents in ·-"

·• .d':cisions · .• ·

·~\ .:", , ' -:

Ashoka's Housing for All initiative persuades builders and developers to address infrastructure deficiencies for the poor according to quantifiable market opportunities

In Thailand, residents collectively negot iate the t erms of their land use and may pool funds to lease or p urchase land

Figure key

~ Science

~ Advancement

p Communication 1t Savings

Ashoka Egypt is attempting to entice private investors with the

potential of a trillion-doll ar housing m arket for th e base of the pyra-

mid. It's a hard task. Plenty of businesspeople have been burned in

lowest-income housing before.

Ashoka's Rochell e Beck describes the ch allenges: "Some builders

and developers see significant potential profits, but th ey do not have

accurate market information about what their new customers-slu m

dwellers-need, want, currently spend or can afford for housing.

Their traditio nal marketing and sales forces have little or no experi-

en ce in slums, nor trusted working relationships with those w ho do .

If a barrier such as ambiguous land title or too few or too expensive

The Ecosystems 185

h ome mortgage products [appears,] the perceived risk often is enough

to sink their interest. "26

To protect th e enterp rise, Ashoka assembles market research to

ensure th at its housing goes to those w h o are truly eligible. Tablet

technology simplifies a sample census, and census takers pho tograph

fami lies for future reference. Such proof of residency helps prevent

latecomer fraud. 27 It also ensures that historic problems of misun-

derstanding the custome r, particularly at the base of the pyram id, are

avoided by capturing their wants and n eed s on the front lines .

Ashoka also acts as a broker, sourcing high-qual ity construction

materials from local builders, assemb ling potential homeowners into

groups to better negotiate w ith microfinance institutions, and consult-

ing university engineers. One su ch initiative through Ashoka Egypt

has yield ed more than ten thou sand n ew h ou sing units. 28

Ashoka has also been actively trying to create a market for afford-

able housing in India. Currently, the cou ntry's swelling urban popula-

tions face a shortage of 24.7 million h om es. In India, a pay stub is a

standard requiremen t to finance a home, but 86 percent of th e urban

population have no proof of income, because they work in the infor-

mal economy.29 T h e ingrained assumption, of cou rse, is that without

a pay stub, a person can't be cred itworthy. All the various businesses

involved in the housi ng project have m ore o r less adhered to the rule,

sticking to w h at they knew : the builders focused on building, and the

financiers focused on funding th ose who met the criteria.

To convince everyone of the shared benefit of hous ing the p oor,

Ashoka h ad to d evelop relationships between the mortgage companies,

fo r-profit h ousing developers, and local community organizations.

The ecosystem for affordable housing works like this: community or-

ganizations act as demand aggregators, bringing groups of consumers

to for-profit developers, and as design an d investment partners. So far,

ten thousand homes have been built, representing at least $100 million

in sales .30 And the building continu es. Ash oka fou n der Bill Dray ton

now considers it "a $340 millio n market fai lure that went away."3 1 In

186 The Solution Revolution

addition to housing projects in Egypt, Ashoka's ecosystem-b uilding

activities for se rvices for the very poor run the ga mut fr o m health to

agriculture to education.

One community's solution, of course, may not be suited for an-

other. Thailand's Co mmunity Organizations Development Institute

(CODI) sca les a general approach rather than a specifi c solution.

CODI carefully connects the elements a hous ing ecosystem needs to

survive-legal representation, interested d evelopers, and land rights-

and then lets the ecosystem operate on its own. L oca l co mmunities

take ownership, and CODI facilitates th e processes.

As with Ashoka, CODI begins with intelligence. Recruits iden-

tify influential individuals in the co mmunity who can share local in-

sights. One case study describes the process: "In the city of Uttaradit,

the initiative started with survey mappin g of all th e s lum s and small

pockets of sq uatters, identifying those s lum s th at could stay and those

that needed to be relocated . This helped link community organ iza-

tions and began building a community network supported by young

architects, a gro up of monks and the mayor. "32

Like the fundin g approach that Govindarajan and Sarkar recom-

mended in Dartmouth's challenge to des ign a $300 hou se, the Utta-

radit community pools money and labor resources und er the control

of trusted ciders. In this way, the w hole co mmunity has a stake in the

o utcome. By becom ing a legal entity, the slum community can nego-

tiate with property owners and buy land or secure long-ter m leases,

either collectively or as individu als.

Residents of the Charoenchai Nimitmai community in Bangkok

pooled th eir resources to buy land, while residents in a neighb oring

community used their n ew legal statu s to negotiate a long- term lease.

Another community, Kolok Village, stretches along a rai lroad com-

pany's property. The slum dwellers agreed to keep their homes twenty

m eters from the track in exchange for lo ng-term tcnure. 33

The beauty of this ecosystem is that with p ro per incentives and

formal status under the law, communities begin to develop their own

The Ecosystems 187

innovations, and solutions emerge from within. By 2012, CODI had

housed more than 80,200 ho useholds in 745 projects in 249 cities.34 It's

doubtful that anyone sleeping und er a proper roof by the train in Kolok

und erstands how much effort went into constructing their homes.

Ending Human Tra fficking: An Ecosystem That Saves Lives

Close to twenty-one million people worldwide, a growing s hare of

t hem children, are trapped in contemp orary forms of slavery collec-

tively ca lled human trafficking . Besides ch ild labor, such slavery in-

cludes forced labor and sex slavery. Globally, human trafficking is a

$32 billion industry. 35

Modern slavery often begins with the phrase "Want a job?" says

Kevin Bales, cofounder of Free the Slaves, a nonprofit working in the

modern antitrafficking ecosystem.36 Trafficking rings recruit margin-

alized, desperate people, luring them w ith the hope of work or pas-

sage to another country, and then separate them fro m their support

networks. The more marginali zed the person, the shorter the reach of

those who care. Once at the mercy of their captors-working in an

African tin mine far from hon est law enforce ment or turning tricks in

Los Angeles without a passport-victims o ft en feel p owerless to find

a way out.

Trafficking requires m any participants. Recruiters and transport-

ers move humans. Bribed offi cia ls turn a blind eye or provid e faked

documents. Guides transport humans past law enforcement. Infor-

mants spy on police. D eep -pocketed investors fund trafficking ven-

tures. "Launderers" clean dirty m o ney. It's an entire black-market

ecosystem .37

Antonio Jose dos Santos Fil ho, a rural Brazi lian down on his luck,

is typica l of the persons who find themselves enslaved in the twenty-

first century. H e was recruited by an acquaintance who flashed some

cash and offered work. Soon Filho rode a bus for two days to the

188 The Solution Revo lution

Brazilian state of Paras. There, armed guards stood watch as he and

others cleared rain forest land for cattle grazing. He guessed he was

in trouble, but learned for sure when he asked for his paycheck. His

bosses told him he owed money for purchases made at the "company

store."38 He would work until he repaid them.

Fi lho was a s lave. He drank the same muddy water the cattle

drank . Each night, he slept under a tarp, prey to insects and inclement

weather. Luck ily for h im, authorities found and freed him. Although

Brazilian law perm its such forced laborers to demand back pay from

their former slaveholders, the lega l system is comp lex and frustrating,

often causing the victims to give up. But this time the Pastoral Land

Commission, in partnership with Catholic Relief Services, a leader in

antislavery work, organized forty-two fami lies affected to demand

restitution. After a five-year legal battle that the victims cou ld never

have afforded on their own, they won 2,670 acres of land and material

to bu ild thirty ho uses.39

Sadly, these triumphs are still too few and far between. The lack of coordination across anti-human-trafficking groups does not help .

David Rogers of the US Federal Bureau of Investi gation admits that

"many of us sh are the goal of eliminating human trafficking, bu t there

are misunderstandin gs about roles. We need to better understand

how t o augment-not compete with-each other. " 40 The mu ltitude of

NGOs focused on the iss ue brings added complexity. It wasn't until

2009 that a few leaders in this area cofo unded an on line public data-

base, the Freedom Registry, which now lists mo re th an eight hundred

advocate groups active in the United States alone. 41 T h e registry 's suc-

cess in driving collaboration on anti-human-trafficking work led to

the creation of another advocate network in Canada.

Yet even w hen separate organizations enga ge, their approaches are

sometimes at odds. Some groups attempt lega l ac tion, while others

maintain a low profi le and focus so lely on rescuing captives; sti ll oth -

ers document the horrors w ith video or photos to raise awareness of

the iss ue.

The Ecosystems 189

Groups can fight human trafficking on four fronts, commonly

call ed the four Ps: prevention, protection, prosecution, and partner-

ships (figure 6-3). Prevention includes both wa rning potent ial migrants

about the dangers of human trafficking, and shaming those who might

benefit fro m it. Protection focuses on helping victims escape and re-

habilitating them. Prosecution encompasses the investigations of traf-

ficking networks. A growing number of countries-134 in 2012-rec-

ognize trafficking as an offense t hat merits legal criminalization; the

FIGURE 6·3

Human trafficking prevention ecosystem

Figure key

The Code is a I commitmen t from more than 1,000 tourism companies to take preventive action against tratticking

Apps like Free2Work and Slavery Footprint help citizens avoid products made by forced labor

( Science

~ The "Real Men Don't Buy Girls" campaign from the Demi & Ashton Foundation reached hundreds of millions of people

End Slavery Now 1TiT operates The New Underground Railroad, the world's largest network o f antislavery activists and organizations

I

190 The Solution Revolution

number of countries lacking such legislatio n shrank by half between

2008 and 2012. Unfo rtunately, according to the most r ecent UN es ti-

mate, global law enforcement averages only one conviction for every

eight hundred people enslaved.42 Partnership is common among nations but a relatively new phe-

nomenon in the wo rld of grassroots antisl avery work. The US State

Department, fo r insta nce, has stepped up its antitrafficking partner-

ships in recent years, in 2005 alone suppo rting more than 265 inter-

national programs in about one hundred countries. 43 The European

Union also has a vigorou s multinational anti traffickin g age ncy. The

EU Anti-Traffi ckin g Coordinator is directly responsible for en suring

that EU nations take complementary approaches in fi ghting traffick-

ers working routes between Eastern and Western Europe, Africa and

Spain, and through Albania into Italy.44

Most antitrafficking organizations, w hether they focus on pre-

vention, protection, or prosecutio n, are small groups with deep ex-

peri ence in the red - light districts of pl aces such as Ko lkata or Haiti.

Some, such as Cambodia's Somaly Mam Foundation, are run by for-

mer victims.45 Their perso nal experience helps them gain the trust of

trafficked women, identify trustworthy authorities (as opposed to

corrupt p o lice), and cope with local mafias in their efforts t o protect

women from trafficking. They run women's shelters and use their lo-

ca l co ntacts to help trafficking victim s find work and to h ead off the

desperati on that drives some victims to try their luck abroad again or,

wo rse, becom e recruiters. Because these groups lack legislative clout

and other resources, they are often vulnerable to corrupt officials and

trafficking netwo rks. These antitrafficking groups are nevertheless

bringing good ideas to bear on a d aunting problem, but often without

a supp ortive ecosystem. Consequently, partnership can benefit these small groups as much

as, if not more than, partnerships between nations. L arger organiza-

tions such as E nd Slavery Now conve ne a va riety of playe rs and allow

grassroots organizations to collab orate and find trustworthy p artners

in this dangerous business. End Slavery Now also operates the New

The Ecosystems 19 1

Underground Railroad, the world 's largest netwo rk of antislavery ac-

tivists and organizations.46

Private companies are jo ining the fi ght, and in ways that go be-

yond feel- good CSR campaigns. "Why do I care?" asks Genevieve

Taft-Vazq uez of Coca-Co la. "If 68 percent of force d labor connects w ith global supply chain s, and we o p erate in over 200 countries, we

know it's in communities w h ere we are, so we have to be vigil ant."

She add s that her job as global manager of workp lace accountability

would be m ade easier with a registry of good and bad labo r recruiters,

to bring greater transparency to labor sourcing. 47

The supply chain isn't the only way companies wage battle di-

rectly against human trafficking. Companies like Palantir bring tech -

nical expertise to tracin g networks of trafficke rs. Palantir techies de-

veloped software that stitches together numerous d ata sources-filed

police reports and inves tigation s, citizen-s ubmitted tips, subpoenaed

phone logs-across geospatial maps and network diagrams to help

prosecutors spot insta nces of trafficking fas rer.48 For the contingent

of Palantir programmers who used to work for PayPal, the p rocess

bears a stri king resemblance to the fraud-detection practi ces of their

former employer. In 201 2 the co mp any donated the software to the

Internatio nal Consortium of Inves ti gative Jo urnalists to help journal-

ists analyze th e illicit markets for human tissue. 49

Coord inated, mu ltisector attempts to fight trafficking are grow-

in g at th e national and international level, from Braz il 's National Pact

for the Eradication of Slave Labor to the G lobal Business Coa lition

Against Human Trafficking. Signatories of the Brazilian pact agree

not to buy from suppliers on the governm ent's "dirty" li st and to sub-

mit to independent audits, to reduce the amount of goods produced

with slave labor.50

Cons um ers have also joined the fight, demanding reliable sourc-

ing inform ati on . At best, clothing labels once gave you little mo re

than " 100% cotto n" and "Made in C hina." N ow, consumers can scan

QR codes (those littl e black-and-white squares see n on everything,

from magazines to ketchup bottles) to see an item 's provenance and

192 The So lution Revolution

care instru ctions and perhaps to even watch videos of the people w ho

mad e it. iPhone apps such as Free2Work grade compani es on their

forced-labor risk factor, and Slavery Footprint, which allows con-

sumers to learn how many "slaves" potentially work for them, also

play an important role in raising awareness of the issue. This is both

a moral and marketing opportunity, one that many companies have

come to recogn ize. Anvil Knitwear's customers can follow its prod-

ucts throu gh the supply chain via t rackmy-T.com. Swiss textile com-

pany Switcher h as similar labels. As actress and UN ambassador for human trafficking Mira Sor-

vino points out, eradicating human trafficking requires enduring ef-

fort. "Child labor issues in the chocolate industry were a big d eal a

decade ago. Consumers pushed companies, comp anies made commit-

ments to avoid suppliers that us ed child labor, and many thought that

becau se it was acknowledged, it was solved. Yet there are still 200,000

children forced to work in the chocolate industry." 51 In short, render-

ing issues of slavery and trafficking obsolete requires persistent action

and coordination from all sides.

Complementary Capabilities and the Effect ive Ecosystem

T he issu es just raised-modernizing education, providing affordable

housing, and eliminating human trafficking-may seem to have little

in common . Little, that is, except that societies wo rldwide h ave so ught

to address them fo r years or centuries-mostly unsuccessfully.

The approaches discu ssed in this boo k, however, can yield signifi-

cant improvements in a wide variety of arenas: new players emerge,

p artnership s develop, and technologies are h arn essed and form the

basis for new business models. As markets for solutions grow more

diverse and sop histicated, new curren cies enable the wid er pool of

players to benefi t from this blossoming of choice, p erhaps providing

citizen capital instead of money for a se rvice. Exchanges that maxi-

mize social outcomes evolve, generating the typ es of solution ecosys-

tems profiled earlier in this chapter and throu ghout the book, from

The Ecosystems 193

the waste reduction ecosystems cu rated by Recyclebank and Waste

Ventures to the emerging car-sharing and ridesh aring ecosystems fu-

eled by market innovato rs like Zipcar and Zimride.

However, these ecosystems are not static. As in nature, the strength

and endu rance of a solution ecosystem are influ enced by d iversity and

constant adaptation. When Ash oka steps in to clarify land title hold-

ings, it is opening up the fl ow of information criti cal t o the housing in-

frastructure, in this case the financing function. When a beaver builds

a dam, it alters the ecological environment, all owin g n ew plants and

animals to thrive. In t he same way, small but critical ch anges by the

convener of a solution ecosystem create n ew opportunities for other

players, enco uragin g them to evolve and build a new market in the

process. (See figure 6-4 for a d escription of h ow ecosystems develop.)

What wasn't viable before can now thrive, p rofitably and sustainably.

The natural world is full of such examples. Cheeky clownfish, for

ins tance, score protection in the barbed tentacl es of sea anem ones. In

return for the shelter, anemones snack on the fish's leftovers or on

the prey their striped guests attract. When alligators in the Florida

Everglades let certain species of birds clean the meat from their teeth,

the reptiles can get a better grip on their next meal. And in Copen-

hagen, some fo ur million honeybees pollinate t he city's flo wers and

plants producing honey, enabling the city's flora to bear fruit and

flourish.

While this last example might seem natural, it is actually the result

of a human-made social bu siness-one of many positive outcomes in

a stunning system of mutual benefit. The C ity Bee Project, known

as Bybi (Danish for "city bee"), is British social entrepren eur O liver

Maxwell's idea to bring millions of h on eybees to Copenhagen to cre-

ate a sustainable honey industry. Working with the city, social organi-

zations, and D anish b usi nesses, the project trains the fo rmer homeless

and the long-term unemployed to become independent beekeepers .

The mod el benefits at least two groups. The city's disadvantaged gain

meaningful work (maintai ning beehives on the rooftops of local busi-

nesses), and honeybees get safe, urban spaces to p ollinate and prosp er.

194 The Solution Revolution

FIGURE 6-4

Fostering a solution ecosyst em : From inception to execution

1. Identify

2. Connect

Problems

Existing solutions

Gaps in existing models/markets

Limits and failures of current players

Connect around a cen tral problem

Conveners bring the problem into

the spotlight

Ascertain relevant technologies and

models to leverage

3. Innovate and incubate

Invest in market-building activities

Convene problem solvers and innovate solutions

Pilot innovative ideas with seed funding

Build and test multiple prototypes

4. Execute and scale

rri Establish standards and benchmarks

Create an ongoing process to refine solutions

Scale solutions

Beekeepers own and operate t he business, w hile profits from the

hon ey are reinvested into Bybi's social and environmental activities. 52

This noble, if unusual, expe rim en t aims at a surpri singly sticky

prob lem: honeyb ees p oll inate 70 p erce nt of all plants, representing a

third of the foo d we eat. But becau se of climate chan ge, n ew agricu l-

tural p ractices, and mysterious bee diseases, honeybees are dy ing off

in droves across Europe. According t o o ne estimate, bees in England

The Ecosystems 195

could go extinct as ea rly as 20 18 if they continu e to decline at the cur- 53 Th . . 1 rent rate. e1r surv1va , and much of our food, increasingly relies

on beekeep ers. Meanwhile, an agin g wo rkfo rce threatens to sink tra-

ditional beekeeping.

. ~or Maxwell, who has a background in sociology, not beekeep-

rng, tt was a problem occurring behind his back. That is, he was little

aware of it until th e w inter of 2009, w hen he sp ied a stack of beehives

one night while drivin g home from work and pulled over to talk to

t~e beekee~er. M axwell was working in Copenhagen d eveloping so-

cial e~terpns_es at the time. But after talking with this local beekeeper

and d1scoverrng the enormity of the problem, the entrepreneur's mind

started buzzing with a n ew id ea.

He started mee ting with beekeepers and biologists and learn ing

more about the issues. He learned that more bees were needed in

the city, t hat cit ies offered bees r efu ge from p esticid es, that the next

gen eration of beekeepers were not being adequately trained, and that

the demand for local and trad itional honey n eeded to be increas ed.54

The so lution lay before him in p ieces. It just needed to be assemb led.

So Maxwell brought together development workers from local busi-

nesses, city leaders, h o usin g associations, employment projects, and

the beekeep ers. Each gro up had knowledge that the others lacked and

needs that the others could satisfy working together.

With th e diverse groups on board, Maxwell convinced the city to

seed-fund the p roject. Local businesses can now partner with Bybi

and "adopt" beeh ives, p roviding a workspace for beekeepers and bees

on their rooftops. Social organ izations, such as Urbanplanen, one of

D en mark's larges t h ousing estates, h elp source the labo r. And Bybi

provides the bees, the training, and the tools to equip the disadvan-

t~ged. w ith new careers as beekeepers. What's more, Maxwell's orga-

111zat1on creates a marketing machine for the local honey industry and

good bu siness. At the end of each season, Bybi and its business part-

ners prod uce CSR reports that bu sin esses can use to court investors

and customers. They also get their own brand of honey to sweeten

their reputation even further.

196 The Solution Revolution

Within Bybi 's ecosystem, bees have a safe harb o r, th e fo rmer

ho meless and disad va ntaged have employ ment, social o rgani zations

meet their goa ls, to p businesses bolster their bra nds, the city is lusher

than ever, and taxpayers don't have to pay a ce nt fo r the army of bee-

keep ers wo rkin g o n their behalf. Problem solved .

Whil e each group- th e beekeepers w ith th e kn owl ed ge, the social

orga ni zatio ns w ith t he labor funn el, and the bus inesses w ith the va-

cant roo ft ops-were integral to the fin al soluti on, M axw ell deserves

most of the credit. He had the vision and drive to tllrn a grave p roblem

into eve ryo ne's advantage. "I kn ew there was a sto ry and an oppor-

tunity in the problem, " he said. "The challen ge was to get the righ t

peopl e to meet."55

Beekeepin g is a ce nturies-old occupatio n given a new twist by

M axwell. O ther ecosys tems, such as the o ne centered on edu ca ti o nal

reform , are being refined and redefi ned by new tech no logies and

bu siness models that public-valu e inn ovato rs are applying in novel ,

produ cti ve w ays . But technology is imparti al. H uman traffickers,

fo r exa mpl e, use o nline access and social net works to scale th eir own

d estructi ve o peratio ns as well. Th e sa me hold s true for terrori st and

cybercrim e networks. It isn't the techn ology p er se that matters; it is

the enabling role that technology can pl ay in a so luti on ecosystem.

Hunge r, p overty, and disease thri ve o n th eir ow n. O utpac ing the

d es tructive fo rces that corrod e soc ial p rogress requires a new model.

No sin gle enterprise can tackle all the facets of a fa st-changing iss ue.

The m ost effective co ntributors in an ecosys tem are inti mately aware

o f w hat they ca n and likewise cannot d o we ll , and they w isely seek

o ut part ners w ith co mplem entary capabiliti es. Unileve r, fo r example,

recogni zed its role in putting Wheel soap into actio n, but also w here

it woul d need p artners.

With hea lth a nd sa nitation, s helter, and eve n hun ge r, th e so lutio n

econ om y is rewritin g the way hum ans ca n grap pl e w ith th e most

dauntin g problems in the world. The technology rev olution is en abling

n ew o rga nizations, new currencies, and new soluti on ecosys tems. A

The Ecosystems 197

new generati o n of wavemakers is challenging traditio nal approaches .

Coupled w ith new attitudes am ong corporate, academic, an d govern-

mental th ought lead ers, t hey are also prod ucing d ra matic results.

But un fo rtunately the solu tio n economy isn't deve lo p ing evenly

aro un d the globe. In the fin al chap ter, we w ill examin e wh at govern-

me nt, business, investo rs, and ind ividuals can do to accelerate the de-

vel opment of the solutio n econom y.