It’s been a while since we’ve written. JLee very recently finished up her MBA training, I’ve been living the startup life in NYC. We are both headed back on the road this summer with Turkey, Solvenia, Croatia, Ireland, Morocco, China & Netherlands on the itinerary.
The Socient Life continues in our search both philosophically and through product and real business models that are making impactful good in the world. For myself, I’ve been interested in seeing the evolution of social impact becoming generationally an ethos within entrepreneurship.
Lately, discussions with my business partner have revolved around scalability, the magic word that has become an ethos in of itself within the startup world, particularly in Silicon Valley. As we wandered Brooklyn artisanal markets for NYC Design Week, perusing the “slow foods” equivalent of craft goods, she became increasingly nonplussed about lack of scalability for any of the products we saw. From marble-hand-chiseled-glazed cups (personal wabisabi favorite of mine, costing its creator 120 hours of work, selling for $34), to art print transfers of surely a graphic student’s creation into sellable greeting card formats – My partner noted how like any cultural art piece, these were singular one-offs, exposable to only small portions of the human population. Maybe one day some archaeologists will dig up our civilizations and these fad market items will become museum artifacts of our epoch. But definitely not of any impactful value in our current day and age.
As I listened to this on the subway, something rubbed me wrong intrinsically about this assessment. While not the denigration of these artist works – I know that wasn’t what she meant – but the sense that something must be scaleable to be important or of value just seemed to be the wrong measurement stick to begin with. But as an entrepreneur and even ironically, a self-proclaimed expert in scaling, I can’t deny that scaling, or at least growth, is important.
Something I’ve been considering over the past half year, is the difference between scaling and multiplying as frameworks for growth. By definition scaling involves replication – to figure out key variables of a product or business model – the formula persay, and stamping those out cookie-cutter like, each the same. Scaling is the law of per unit economics, lowering costs of each item produced. But this methodology also implies many issues – there is conformity of each unit, reduction of variability. In another friend’s words, it is cancer. Like any virus, it can replicate but cannot create, reproduce, and extending the metaphor further, potentially destroys the host organism.
In ways, this could summarize the 3rd Industrial Revolution as the Davos-types love discussing these days. Factory production has dominated everything from how corporations are set up to the compartmentalization of our education system into discrete subjects rather than integrated learning.
Multiplication is a different process. It is a sharing, birthing creative process if you will. If one thinks about stem cells and their potential for differentiation into specialized organ cells, one gets the picture how powerful that can be. I like the abstract concept of multiplication because it allows for individual expression, there is power in the numeric quantifying of individuals but no need to enforce conformity. There is also intrinsic value in each ‘snowflake’ if you will, the uniqueness gains greater prominence than within a scaling system.
I’ve lately been noticing models that seem to capture these ideas. Spotify, despite its fundamental model of making money off the launch of major pop stars, is a platform that allows expression, and more importantly, discovery of very small artists. It even pays them. That means that my buddy musician who has 57 followers and probably will never be able to give up his day job, can still profit however slightly, from his passion and side hobby of making music. Maybe he will be discovered and become great. But becoming great isn’t necessarily the right metric either. He is like our Brooklyn artisans- the pleasure of having created one’s soul into art, the encouragement and appreciation he can share with his followers, and even the inspiration those followers may draw from their rather eclectic tastes – there is value in this.
Economists call this the long-tail end of the curve. At a singular level it may be just nice-to-have, but imagine you pile up all the musicians at this tail end, plus all those burning artists stuck in corporate lives that you attract to the field, and something very powerful begins to build.
Another example is Prose, the customizable shampoo. I recently read an article on how what is amazing isn’t even just that they custom blend based on your preferences, the permutations of such combinations incredibly complex. But that they have actually managed to do a production system based on such customization is astounding. To me this points to the technical aspect of multiplication, that we are beginning to breach a technological point where it is possible to mass-produce uniqueness.
Putting aside the awful marketing implications of creating entitled cultures of ‘unique snowflakes’, I find these concepts fascinating because there is definitely social impact potential. For example, one of the biggest problems of development in places like Africa has largely been around investment and building infrastructure. Traditional Western, and now even Asian growth has centered largely around scalable manufacturing. But for many obvious and not-so-obvious reasons, this has not worked well with Africa. Yet on the streets of Kampala or Kigali, one sees that entrepreneurship, the chutzpah of hustle is alive and thriving. Kids hawking potato crisps, elegant roadside nail designs for the sophisticated office ladies, the tongue-in-cheek ‘juakali’ (innovation due to scarcity) fixes involving duct tape and connecting strange pipes and wires until a motorcycle moves – the temporary and impermanent is constantly evolving in cleverness. Hustle, is powerful.
When I think about next generation social impact models, I love the idea of rather than forcing conformity of large-scale infrastructure on locals, one can rather build solutions that adapt ground-up to the use cases of local economies. Duka Connect is a really great example of this. Conceived by a Stanford AI genius, an ex-BCG analyst & a native Kenyan entrepreneur, Duka harnesses the power of AI image recognition to transform the millions of African microbusinesses (picture all those wet markets) into scannable, inventory-able, and categorizable entities. A fast sweep of cell phone over any purchase – mangoes, plaintains, roasted corn, and the technology recognizes every item, calculates the cost, backend creates inventory, stocking & financial data management. An added powerup is the big data this creates. Not only do shopkeepers now instantly gain visibility to their own selling patterns and cash management, but usage of the technology suddenly creates visibility for major CPG firms to gain immediate insight into entire regions of buying patterns, previously opaque.
This latter is a really amazing development because even myself, having worked in solar and knowing data tracking in these rural regions is literally a pencil-paper and assiduous documentation process by thousands of field staff, prone to human error – to penetrate and bring such information to light attracts business and investment. I don’t want to belabor this point, as I am more fascinated by the empowerment implications to these microentrepreneurs. However, remembering our Pralahad base-of-pyramid lessons, the implications of creating revenue opportunities for retail can be a very uplifting way to build economies. Proving revenue can be achieved, treating the poor as exalted consumers with preferences and demands to be fulfilled, the influx of jobs and even organic build of supply chain infrastructure into previously ignored markets – this is a great way to bring big resources into underserved areas.
Getting back to the question of scaling v multiplying, I think there’s still more thought work that needs to be done around multiplying. The Duka example is great in honoring the independent variability of African microentrepreneurs and their wares. The technology allows them to maintain that individuality right where they are, rather than create a ‘you must do this and invest in that to succeed’ bar (of conformity) that may not meet their immediate realities. Perhaps this isn’t so much multiplying as it is about encompassing variability in all its humanity. It’s definitely a very different approach to the ethos of disruption (enforcement even?), but no denying that it also changes how the world as we see today into a more human-centric and honoring place.
My thoughts here are still connecting, but will try to revisit in upcoming months. Meanwhile, my bigconfession for updating LeeandLo. Which is simply my own Juakali discovery that one can get into no end of events in NYC for free on a press pass. So showcasing updated blog was important to demonstrating that end, and there you go. The Socient Life.