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|Articles - May 2014|
|Monday, April 28, 2014|
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IV. Silicon Valley humanitarians
Why do investors shy away from mission-driven businesses in the developing world? Ann Mei Chang doesn’t mince words. “You’re working in challenging environments with poor people,” she says. “It’s not a great equation for people who want to invest.”
A former senior engineering director at Google, Chang now holds the title of chief innovation officer at Mercy Corps, the well-regarded, Portland-based aid organization. Mercy Corps has a long history of working on what Chang refers to as “scalable” social ventures — such as microfinance operations that loan small amounts of money to people in poverty. Now Chang aims to bring her “business expertise, a crisper focus and more rigorous methodology” to these efforts.
Getting investors onboard is part of that project. Enter the Mercy Corps Venture Fund, a Chang-led initiative aimed at attracting early-stage funding to social ventures in the developing world. The fund is seeking a $10 million raise, with about a dozen projects currently under review. “The focus is about creating a business model that can be self-sustainable,” says Chang. “We want to be very rigorous about the projects that look most promising. Only after we prove the model can work can we look at investors.”
One possible candidate is MiCRO, a natural-catastrophe microinsurance startup Mercy Corps launched, along with a local microfinance institution, Fonkoze, and the global reinsurer Swiss Re. Following a pilot project in Haiti, the company plans to add hundreds of thousands of clients over the next five years, emerging with the first global- insurance product that can mitigate natural-disaster losses faced by the poor in Africa, Asia and Latin America.
The Mercy Corps Venture Fund capitalizes on two simultaneous trends: On the nonprofit side, there is growing concern about the limitations of the traditional grant model, in which aid programs receive large amounts of money but often serve a limited number of people. Meanwhile, a new crop of investors, especially in the tech sector, are looking for outside challenges and opportunities. Silicon Valley executives have amassed enormous fortunes, Chang observes. “They are starting to say, ‘I have more money than I need; how can I make the world a better place?’”
In recent years, tech leaders have taken a more aggressive stance on a range of public-policy issues, including immigration reform and government surveillance; in April, executives from Apple, Google and others collectively announced their opposition to the Keystone XL Pipeline. Silicon Valley entrepreneurs can be cynical about USAID projects, says Chang. But incubating a small business and taking it global — “that’s a language they understand.” And while Chang acknowledges some services will always require a subsidy — “the public good of having people vaccinated is high enough, you don’t want to rely on people actually paying” — she says other projects, like financial services and urban sanitation, are well suited to a market intervention.
Mercy Corps, which in April announced a new board member, Gisel Kordestani, former director of new business development at Google, is moving more formally into that space. Says Chang: “We want to figure out how to bring the best practices of Silicon Valley to the NGO sector.”
The problem: “Ninety-five percent of our assets sit in investment accounts, and only five percent are used to do grant work. That five percent doesn’t even come close to what we can do to enhance economic development.”
The solution: In January, the trust launched Invest Oregon, an initiative that will redirect a portion of MMT’s approximately $800 million “corpus” to investment vehicles. So far the fund has invested in the Portland Seed Fund and Ecotrust Forest Management.
The takeaway: “In the past we have focused on nonprofits, but we need to look at social outcomes that come from the for-profit side. There’s a great entrepreneurial environment out there, and we need to start interacting in that space.”
Thursday, April 30, 2015
BY LINDA BAKER | EDITOR
Earlier this week we posted an article from our May issue: It’s a Man's Man’s Man’s World. The story covered the gender divide in tech from the perspective of male workers. Twitter didn’t like it.
Monday, April 27, 2015
BY LINDA BAKER
A longtime technologist and entrepreneur, Dwayne Johnson, 53, is managing partner of PDXO/GlobeThree Ventures, a strategy and business consultancy in Portland.
Friday, March 27, 2015
BY ROBERT MULLIN
A new energy-sharing agreement sparks concerns about independence and collaboration in the region's utility industry.
Wednesday, April 29, 2015
BY JACOB PALMER | DIGITAL NEWS EDITOR
Portland is awash in rideshare options. We ask the head of Flywheel what sets his app apart.
Thursday, April 23, 2015
BY LINDA BAKER
On April 1 I attended a forum at the University of Portland on the sharing economy. The event featured panelists from Lyft and Airbnb, as well as Portland Mayor Charlie Hales. Asked about the impact of tech-driven sharing economy services. Hales said the new business models are reshaping the landscape. “But,” he added, “I don’t pretend to understand how a lot of this [technology] works.”
Wednesday, May 20, 2015
BY KIM MOORE | RESEARCH EDITOR
An earthquake would completely destroy many Oregon businesses, highlighting the urgent need for the private and public sectors to collaborate on shoring up disaster preparedness, said panelists at an Oregon Business breakfast summit today.
Friday, March 27, 2015
BY LINDA BAKER
Founded 12 years ago, Keen Inc. likes to push the envelope, starting with the debut of the “Newport” closed toe sandal in 2003. Since then, the company has opened a factory on Swan Island and a sleek new headquarters in the Pearl District. The brand’s newest offering, UNEEK, is a sandal made from two woven cords and not much more.
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