Monday, November 03, 2014

100 Days of Gratitude, Day 38 - Chris McGoff

Chris McGoff, Universe Denter
A visitor asked me recently how, in 2001 at the age of 40, I changed from a successful World Bank expert to an entrepreneur whose goal is to unleash the expertise of the "crowd."

I briefly recounted my story and referred them to my TED talk. But when my visitor left, I realized that I had failed to tell them about a profound influence on my transformation - someone from whom I learned things that I still use every day.

That someone was Chris McGoff.  Chris and his firm, GDSS, had been hired by the World Bank to work on high-level issues with senior management.  Chris helped us design a number of breakthrough approaches to strategy and change involving the president, managing directors, and vice presidents.

On the side, Chris also helped Mari and me design something that has had an even greater lasting impact - the Innovation and Development Marketplaces, which were the probably the first-ever global crowdsourced venture events for ideas related to international development and poverty reduction.  Unlike the work with senior management, Chris's work on the marketplaces was initially much lower profile, and given the long hours and startup-like environment, I am sure his firm barely broke even on the engagement with us.

One day, I asked Chris why he and his team were spending so much overtime helping us create something completely new and untested - something that could fail completely.

"Because," he said, "if it works, it will dent the universe.  And I think it is going to work."

He was right - the marketplaces did work, so well in fact that Mari and I left the Bank to launch GlobalGiving. which has now funded over 10,000 projects in 162 countries.  Just as important as the skills Chris taught me (you can read about them in his book, which I recommend), was the aspiration of denting the universe - in other words trying to do something that makes the world a better place.  Those words resonate still, including with a new initiative called Feedback Labs I have co-founded.

I do have one big regret.  As Mari and I were leaving the Bank, Gary Hamel and Robert Wood were writing an article for the Harvard Business Review about the Development Marketplace.  For editorial reasons, the authors wanted to keep the "cast of characters" short.  Mari and I were featured, but they left out Chris* , whose dent in the universe has rippled powerfully outwards over the past fifteen years.

Thank you, Chris.

*They also left out Monika Weber-Fahr, whose exceptional management of the day to day preparations was critical to success.
Share on Facebook

Tuesday, October 28, 2014

Revenues, Votes and [X] in Philanthropy?

Beyond Compliance, a new paper from the Center for High Impact Philanthropy and Wharton Social Impact Initiative is the best summary I have seen of tools that non-profits and donors can use to measure impact. It also contains some rare common sense that can help readers chart a reasonable and feasible approach.

I was struck by the paper's conclusion that there is  “an (over) abundance of resources for funders and non profits, sometimes leading to confusion.” To me this gets to the root of the problem, which is that impact measurement is supply driven rather than demand-driven.  

What do I mean by this?

In the commercial sector, no one talks about an overabundance of measurement tools leading to confusion.  Instead, companies are always looking for new and better tools that measure what their customers want and like.  Why?  Because they will go out of business if people don’t buy their products.   

In democracies, the same dynamic has led to increasing sophistication with polling, focus groups, etc, because politicians need to know what their constituents care about.  If politicians fall out of touch, they get booted out of office.  

Revenues serve to focus the mind in market economies, just as votes do in democracies.  Few would argue that markets or democracies are perfect, but these forms of economy and government seem to  perform better than all the other forms that have been tried from time to time (to paraphrase Churchill). Markets and democracies both function better with rich sources of analysis and information. But all of that information is valuable because it drives toward simple, bottom-line metrics - revenues and votes.

What might be the equivalent of "revenues' or "votes" for the aid and philanthropy sectors? That is a great question that I am pleased to be addressing in the time ahead with Katherina Rosqueta, Cecily Wallman-Stokes, and their colleagues at the Center for High Impact Philanthropy and the Wharton Social Impact Initiative.  If you have ideas, sign up at Feedback Labs, and let's see if we can make some progress together.  

Entrepreneurship as Experimentation

"The solution of the economic problem of society is... always a voyage of exploration into the unknown."

That is Friedrich Hayek, as quoted in Entrepreneurship as Experimentation, a new paper that Michael Clemens flagged to me recently.  It emphasizes the important disruptive impact that entrepreneurship has on society.  But it's also a refreshing antidote to so much of the nonsense that is written about entrepreneurship.

Much effort (and hot air) has gone into honing the selection of entrepreneurs by venture capitalists, incubators, academics, and philanthropic funders.  Some people claim to be able to have knock-out tests for "real" entrepreneurs and/or have a rigorous way of assessing the likelihood new ventures will succeed.

But the reality is different:

  • Nearly two-thirds of all startups fail.
  • Only six to eight percent of startups generate good returns to venture investors.
  • Even the best venture capitalists are unable to predict which of their investments will succeed.

Seasoned venture capitalists understand the implications.  The key, in the words of the authors, is to "democratize entry and facilitate efficient failure."  Good venture firms create a large portfolio of experiments, look for ways to reduce the cost of experimentation, gain early information about likely success (through methods like the lean startup approach), and quickly exit investments that are not paying off.

The same "democratization of entry" approach is now underway in the citizen sector through GlobalGiving and other platforms.   A small group of people is now even starting to think about democratization of entry in the government sector.  In both sectors, facilitating efficient failure will be crucial.  Efficient failure requires effective feedback loops, and a number of interesting operational and funding collaboratives are now underway.

Stay tuned.

Monday, October 27, 2014

100 Days of Gratitude, Day 37 - Sally Osberg

Sally Osberg
"This is just something we have to take a chance on."

That was Sally Osberg, president of the Skoll Foundation, in early 2002, months after we launched GlobalGiving. Mari and I had a great idea, but little track record in making markets for good on the new-ish World Wide Web.

Our site was extremely crude, with none of the polish and few of the features it has now. Still, we had launched what would currently be called our minimum viable product - a platform that had already intermediated a few donations to organizations overseas. We had at least taken the first step, gone from zero to one.  The promise of what it could unleash was tremendous, if still uncertain.

The Skoll Foundation thus became one of our earliest backers, and injected critical resources at a crucial period of our early life. Without that money, we might well not be in existence today. And since we were the first global crowdfunding and crowdsourcing site "for good" on the web, I like to think we played at least a small role in encouraging the emergence of so many other great "crowd-x" sites such as KivaKickStarter, and Indiegogo. (The pathbreaking, education-focused DonorsChoose started around the same time we did, and we learned a huge amount from them along the way.)

Since that initial investment from Skoll Foundation, GlobalGiving has helped mobilized over $150 million from hundreds of thousands of donors and companies to more than 10,000 projects in 160+ countries. We have made it possible, for the first time in history, for nearly every socially oriented group in the world to have their ideas heard and compete in the global marketplace for funding.  As we now embark on phase two of our vision, which is to create a virtuous cycle between quality and quantity, it is time to take a moment and say:

"Sally (and Jeff!) - your foresight and willingness to take a risk at an early stage helped put a dent on history.  Thank you."

Tuesday, June 10, 2014

25 Websites, Blogs, Books, & Courses I'd Like to See

  1. CouldBe
  2. MaybeMaybeNot
  3. ConfirmingMyBias
  4. A Sample of One
  5. Unbiased But With a Variance of Infinity (HT Jeff Hammer)
  6. Optimizing Around the Wrong Mean
  7. Embroidering on the Head of a Pin
  8. Much Ado About the Wrong Thing
  9. What Is The Role of Intelligence
  10. Things We Used to Think (and Might Again in the Future)
  11. What Do We Know, and How Do We Know It?
  12. How Should I Know?
  13. Maybe I am Wrong
  14. Fifty-one Percent
  15. Until Proven Wrong
  18. Not The View of the Author
  19. Stealing Home
  20. Causation, not Correlation ;)
  21. Drinking My Own Kool-Aid
  22. Eating My Own Dog Food
  23. Less Quantity, More Quality
  24. Mean Time to Moron
  25. Push to Failure

Monday, June 02, 2014

100 Days of Gratitude, Day 36 - Barbara Gee

The Awesome Barbara Gee
There are many early but unheralded heroes of GlobalGiving, such as Randy Komisar and Debra Dunn.  But none played a more important role than Barbara Gee, who sat Mari and me down at her kitchen table in Menlo Park in late 2000 and said "So you don't have a business plan? That's ok; let's write one right now."

Barb had been recommended to us by Randy, who knew her from their days at the legendary Silicon Graphics (and before that she was at Hewlett Packard).  He knew that Barb was a bleeding heart who wanted to put her hard core business skills to work for good.

Starting a new organization from scratch after fifteen years as a bureaucrat was terrifying, to say the least.  We knew absolutely nothing about marketing, website technology, product development, financial statements - not even about how to establish and run a payroll or HR system.  All of those things had been done for us at the World Bank.  Startups require a lot of bluster, and in the early days that was pretty much all I felt I had.

No matter.  Barbara was our guide to how to think about and run a business.  She was extremely matter of fact, and taught us how to delve into new areas and just make decisions, knowing that we would have to revisit those decisions in the future.  She helped us work on pitches, think about business development, manage tech firms - you name it.  She even put us up in her garage apartment (the one with the bathroom in the kitchen!) on our first few trips to the west coast.

Barb has done many interesting socially innovative things over the past decade, and she is now VP of the Anita Borg Institute, a powerful network of women in technology.  The other day I realized that, for all the help she gave to us - and by extension to the 10,000 projects in 144 countries that GlobalGiving has supported - we paid her the sum of exactly zero dollars and zero cents.

This was not our intent; in the early years we had no money.  But I still feel bad about that, because  I for one believe that highly committed and competent people should not have to always "do good for free" by volunteering their time.  So I will be looking for an opportunity to re-pay Barbara part of what she has earned.  (I seem to recall that Barbara is a Buddhist, so the good news is that I can pay her in my and her next life if not this one.)

Thank you for everything, Barbara.

Share on Facebook

Tuesday, April 08, 2014

Regular people out-forecast CIA agents

What's so challenging about all of this is the idea that you can get very accurate predictions about geopolitical events without access to secret information. In addition, access to classified information doesn't automatically and necessarily give you an edge over a smart group of average citizens doing Google searches from their kitchen tables.
That is from a recent NPR piece about how a group of regular citizens have been able to make more accurate forecasts than CIA experts.  To its credit, the CIA actually sponsored this work, in collaboration with Philip Tetlock, whose work I have blogged about before.  It also gives further weight to the importance of taking a dose of humility along with your own perceived expertise.

The CIA official who helped sponsor the work remains hopeful that experts still have a role, however:
Matheny doesn't think there's any risk that it will replace intelligence services as they exist. 
"I think it's a complement to methods rather than a substitute," he said. 
Matheny said that though Good Judgment predictions have been extremely accurate on the questions they've asked so far, it's not clear that this process will work in every situation. 
"There are likely to be other types of questions for which open source information isn't likely to be enough," he added.

Share on Facebook

Saturday, March 08, 2014

Tyranny of Experts - Consumer Reports Edition

How often have I needed to replace an appliance and just gone to Consumer Reports, picked one of the top couple of models (usually the top one), and bought it sight unseen, happy in the knowledge I had bought the best - and with little effort?  Today, when I went online to decide on a vacuum cleaner,  I realized what a mistake that can be.

Consumer Reports gave the highest rating to a Kenmore, saying it is "impressive" and the "top-pick:"

I found it online and was about to purchase, but then looked down at the user ratings and saw that users gave it only 2 stars out of a possible 5.  Worse, 75% of actual users would not recommend it to a friend.  Here is the summary:

And here is a typical user review:

It took me about 5 minutes of scanning the user reviews to decide not to purchase the Kenmore.  And to be honest, I was pretty shocked.  Despite what the experts said, regular people seemed to hate this unit.

So I started skimming down the page to look for models that users themselves seemed to like.  I found a Miele, which was given mediocre ratings by the experts at Consumer Reports.  But actual users gave it 4.4 out of 5 stars:

And here is a typical user review of the Miele:

Now I'm not saying the Consumer Reports experts aren't smart.  I am sure they are.  And in some cases, their ratings agree with those of users.  The problem is that their own scorecards for quality are based on factors that are not well aligned with what consumers themselves actually care about.

Will I continue to subscribe to Consumer Reports?  Probably.  Will I listen blindly to their recommendations?  No.  From now on I will start with feedback from consumers - and then, if I have time, I will read the expert reviews.

[This post elaborates on a piece I wrote earlier for the Center for Global Development.  For more on the topic of feedback loops, citizen sovereignty, and development, see my upcoming review of Bill Easterly's new book, The Tyranny of Experts. Or better yet, buy the book itself. ]

Share on Facebook

Tuesday, February 25, 2014

Expertise and Humility

At a conference the other day, someone introduced me as a leading "expert."  I am as susceptible to flattery as the next guy, but over time I have grown more aware of the limits to what I know.

The general understanding is that you can have "hard knowledge" in the natural sciences, but less so in the social sciences.  Hard knowledge means that you can replicate what you know over and over again in the real world via experiments or projects.  Bridge engineers are typical examples - give them any known terrain and they can build bridge after bridge that will stand up in every day use.   This is because the properties of the materials are well known, and the interactions between the materials are relatively simple.  Standard engineering formulas can thus be taught in schools around the world, and engineers who speak different languages can successfully converse in the lingua franca of mathematics.

As we move into the domain of human interactions, the properties of the materials (people) are highly variable from person to person.  What's more, the interactions between individuals often affect the properties of the individuals themselves by changing emotions, feelings, attitudes, strategies, and even body chemistry. Human systems are thus hugely more complex than most others physical systems, and we quickly lose the ability to model them in any dependable way.  How social interactions occur in a particular family, neighborhood, town, province, country, or continent can only rarely be generalized to different families, neighborhoods, and countries.

Recently, there has been unsettling news even for medical research - an area where we used to consider our knowledge "hard."  Last year, for example, Begley and Ellis, two researchers, looked at 53 landmark cancer studies and found they could replicate the results of only six of them.  Just last week, a 25-year retrospective study found that mammograms have no impact on death rates from breast cancer, overturning decades of conventional wisdom.

Philip Tetlock's work has shown that experts in a wide variety of disciplines are no better - and often worse - at prediction than computers or untrained people.  As I noted earlier:
College counsellors who were provided detailed information about students and even allowed to interview them did worse in predicting their freshman grades than a simple mathematical algorithm. Psychologists were unable to outperform their secretaries in a test to diagnose brain damage.
Closer to my field of international development, Michael Clemens and Justin Sandefur of the Center for Global Development have examined the work of Jeff Sachs and Paul Collier - two experts highly sought after by aid agencies for their insights.  After examining Sachs's work on the Millennium Village Project and Collier's work on migration, Clemens and Sandefur found fundamental errors in analysis, data, and logic.

After reading these devastating critiques, I began to wonder how many studies go unexamined.  There aren't enough Begleys, Ellises, Clemens, and Sandefurs to go around to review all research.  We used to assume that professional journals performed this type of quality-control function, but just this month two journals were forced to retract 120 articles that they found had been computer-generated.  A couple of years ago, even a prestigious peer-reviewed mathematics journal had to retract a machine-generated "nonsense paper."

A 2005 paper by John Ionnidis took a macro approach to this question.  It looked at the way that much research is done and concluded that, because of statistical problems, design flaws, and skewed incentives, the majority of published research findings are false.  This paper has been the subject of much discussion, but whatever the exact numbers it seems clear that most research findings should be taken with a healthy degree of skepticism.

All of this is not to disparage the value of research and analysis.  To the contrary, it calls for more.  It calls for a lot more trial and error, as suggested in Jim Manzi's excellent recent book Uncontrolled: The Surprising Payoff of Trial and Error for Business, Politics, and Society.  It calls for more "problem-driven iteration" as recently described by Andrews, Pritchett, and Woolcock.  It calls for much greater use of feedback loops in aid, philanthropy, and governance, with pioneering work being done by groups such as Feedback Labs.

But it does suggest the limits of what we (think we) know in many fields.  It calls for modesty and humility.  It calls for us to hold our beliefs lightly.  And, lest we fail to hold our beliefs lightly, we should keep in mind the damage we can do when we don't, as so powerfully described in Bill Easterly's new book The Tyranny of Experts, which I will review in an upcoming post.

Wednesday, January 15, 2014

The $100 Million Men

Dave Goldwyn
Dave Goldwyn - $100 Million Man 
We just passed $100 million in online transactions on GlobalGiving, with over 9,400 projects funded in 140 countries.  This is due to the amazing generosity of 370,000 donors and an amazing list of many of the world's most innovative and rapidly growing companies - not to mention what I personally think is the world's best network of strategic partners and funders.

And you want to talk about a truly exceptional team that delivers wow, wow, WOW?  We got that, too (it's our secret sauce, as anyone who has met them knows).

But that's not all.

Tom Bird - $100 Million Man
In the early days, we would go for long stretches with ZERO donations going through the website.  I still remember when we hit our first $100,000, which seemed like a miracle after so much trial and error and so much blood, sweat, and tears.

There were times early on when many people said "This will never work - it's a pipe dream, you should have stayed at your nice secure job at the World Bank."  Since at that time we were the first (and only) global online crowd funding platform,  I admit I wondered if the nay-sayers were right.

Why did we keep going during that tough start-up phase? And how did we go from $100,000 to where we are now? The answer in no small part lay in our first two board chairs, Dave Goldwyn and Tom Bird.  I call them GlobalGiving's $100 Million Dollar Men.

Fran Hauser - the $1 Billion Woman?
In the non-profit field, being on boards is often a thankless task. You don't get paid, the organization you are trying to help is hampered by all sorts of constraints, and you don't even get much recognition.  As a result, it's hard to find board members who are both really good and also willing to commit the time and effort needed during the stressful early years. Dave and Tom broke the mold in terms of competence combined with commitment, and we would not be anywhere near where we are today if we had not been lucky enough to have them at the helm.

Someone said to me yesterday "I can't wait for GlobalGiving to get to the next $100 million!" I replied, "But why would we be satisfied with that?  We won't be happy until we achieve $1 billion." His jaw dropped.  And to be honest, I surprised (even scared) myself.

But then I reflected on our new board chair, Fran Hauser, and her extraordinary fellow board members. So when I ask myself how like it will take before I writing a post titled "The $1 Billion Woman," I know the answer: not long.

Stay tuned.