OK October 18, 2010

i agree, fractal, replicable patterns of local commerce seem to be arising. more resilient and ductile by nature, not as brittle as long chain economies that depend on all the pieces to stay in a complex alignment. many small pieces loosely joined, to use an internet metaphor. in one sense it could be thought of as internet protocols rippling through the economy just the way the old industrial economy was a product of an abundance of centralized energy production that needed appliances to use up all of its capacity and people to buy them in bulk to keep the machine going, and growing with consumption increasing, etc. transition economies are locally focused, creating pooled closer knit networks where value is shared. but keeping these "economic biosphere reserves" globally linked is also a design imperative.

On Oct 16, 2010, at 1:43 AM, Tamzin Ractliffe wrote:

Brilliant image and analogy Christine! I have been aware of a similar phenomenon in France this week with the range of smaller shops / service providers etc. more locally connected and operational as opposed to single major chains – its a similar thing to my mind and something I was wondering how to articulate.

Nice!

 

From:

 openkollab@googlegroups.com [mailto:openkollab@googlegroups.com] On Behalf Of Christine Egger
Sent: 15 October 2010 11:25 PM
To: Suresh Fernando
Subject: Re: [OK] Why Virtually All Social Venture Financiers are Missing the Boat!!

 

Hi Suresh,

Thank you for the quick & thoughtful reply. Glad to be back :)

I really do love the attention you're putting on the value of aligning values and models. And yes, uber-important that we get good at checking the assumptions we bring to both, and that we get (or remain) open to changing them as needed in order to find a closer alignment.

The really good question that seems to sit at the center of your recent video and email:

Is there such a misalignment between
1) the conditions created by existing financial models and
2) the conditions necessary for socially beneficial projects to thrive
that regardless of the very best intentions of everyone involved, we can't possibly create a context in which socially beneficial projects thrive through the application of existing financial models?

I'm not convinced that the misalignment is that extreme. I've found a bridge of sorts, between the two, in checking my assumption around the concept of scaling. I no longer think of scaling as only "making a single thing bigger." It also means "making more of these single things." If we think of small, local, socially-beneficial project as snowflakes, and we want more snow, can we think of ways to leverage existing financial models to build -- not bigger snowflakes, but -- a bigger snow machine?

Christine

Links:
Connections between assumption-checking, physics, and social development: http://bit.ly/CDEgger/Thesis
Tom Munnecke's essay on Cats, Toasters, and Snowflakes (and ways of understanding how each fails and thrives): http://munnecke.com/blog/?p=146

On 10/15/2010 4:07 PM, Suresh Fernando wrote:

Hey Christine,

Will do... just as you surmised, my intention is to shake things up and generate some deep reflection... Forgive me, I am an activist at heart... one that is just trying to do what I believe is the right thing...

There seem to be two issues that you identify:

1. Changing the dialogue so that it is more nuanced and critical
2. Acknowledging that lots of people are creating lots of value.

I`m not sure exactly what would constitute 1. to be honest. I identify one specific issue relating to fundamental assumptions that I think guide virtually the whole space. Clearly there is room to talk about more than this and if expanding the scope is what you, and others, want then we can do that. Also since the discussion has yet to get rolling, it`s hard to conclude whether it is nuanced and critical or not. Or maybe I`m misunderstanding what you mean by this...

As for acknowledging value... even if I think that it is important to think deeply about some of the assumptions that have been transported from the traditional finance space that have somehow permeated how social financiers think, my contention is not that others are not creating value.

I simply think that there needs to be some deep discussion about the connection between underlying values and the models that result from those values...In my view this could lead to the creation of substantially more value. If you agree that having a large numbers of people and projects focusing on socially beneficial projects is a good thing then we are fundamentally in alignment...

Let me ask you a couple of questions:

1. Do you think I`m wrong?
2. Since you seem to want me to include you at the right time, and I would like to put you back on the list, please clarify for us what sort of dialogue or conversation is acceptable.

With Love,

Suresh

On Fri, Oct 15, 2010 at 12:49 PM, Christine Egger <christine@socialactions.com> wrote:

Hi Suresh,

I'm not a fan of the way this 'invitation to dialogue' has been framed, as much as I appreciate your wanting to shake up the conversation a bit.

Please take my name off of the distribution list, and put it back on as soon as there's a return to nuanced, critical analysis (ideally one that acknowledges the value of each element in this nested, system of support we're all a part of).

Hope that happens so quickly that I don't miss a beat...

Christine

On 10/15/2010 3:22 PM, Suresh Fernando wrote:

Hey Kevin - no ones beating you up ;-) I`m actually hoping you beat me up by providing lots of damning evidence that I am totally off track ;-)

On Fri, Oct 15, 2010 at 12:19 PM, Kevin Jones <jones@goodcap.net> wrote:

no real appetite for a discussion where it's announced im going to be beat up.

 

On Oct 15, 2010, at 11:21 AM, Suresh Fernando wrote:

Dear Social Finance Ecosystem ;-)

The subject line reflects what I believe to be true but I am hoping that I am wrong. Understand the inflammatory nature of the subject line as a call for dialogue ;-)

Please check out the following video: 

In this video I make the case that the approach that social financiers take which is to invest only in projects that are highly scalable misses the boat because it is rooted in an old paradigm.

This is the approach that traditional financiers, venture capitalists take in their attempt to maximize financial profit. The approach is rooted in the principles that underlie capitalism; survival of the fittest, self interest, greed, individualism etc.

What social financiers (impact investors) are doing is importing existing models from traditional finance and applying these models in the social finance space.

What they need to be doing is asking themselves what values underlie the notion of social finance in the first place and developing capital allocation models that satisfy those values.

I maintain that the goal of social financiers should be to try to populate the world with as many socially beneficial projects as possible; to try to empower individuals to invest their energy in service of their communities and the world!

This requires developing models that support a much larger number of small projects that, in all likelihood, are not going to be scalable!

This will require that they discard their reliance on traditional finance models and that they start from scratch with some deep reflection on what role they see themselves playing as social financiers!!

 

With Love.

 

Suresh

 

Also note that there are three other videos that I have recently recorded that might serve to provide some context for what I am thinking:

• The problem of Funding Early Stage Social Ventures: 
• On Thinking Beyond Your Nose: 
• Why Can`t We Come Together: 

-- 
Suresh Fernando 
YOUTUBE, WEBSITE, FAN PAGE,  BLOG,  TWITTER,  FACEBOOK

'The counter cultural revolution was a rhizomatic meshwork of loosely-coordinated, loosely-affiliated struggles. The goals of these struggles weren’t always complimentary, but the struggles were aligned and together they staged a mass offensive to shatter the status ...quo'. - from the Coalition of the Willing

 

Crouching tiger saves the watershed

 

-- 
Suresh Fernando 
YOUTUBE, WEBSITE, FAN PAGE,  BLOG,  TWITTER,  FACEBOOK

'The counter cultural revolution was a rhizomatic meshwork of loosely-coordinated, loosely-affiliated struggles. The goals of these struggles weren’t always complimentary, but the struggles were aligned and together they staged a mass offensive to shatter the status ...quo'. - from the Coalition of the Willing

 

-- 
Suresh Fernando 
YOUTUBE, WEBSITE, FAN PAGE,  BLOG,  TWITTER,  FACEBOOK

'The counter cultural revolution was a rhizomatic meshwork of loosely-coordinated, loosely-affiliated struggles. The goals of these struggles weren’t always complimentary, but the struggles were aligned and together they staged a mass offensive to shatter the status ...quo'. - from the Coalition of the Willing

 

-- 
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a kind of blunt ignorance that pushes forward to evolve is my core talent.