Friday, July 20, 2007

So why not start in two places?

I've been thinking non-stop about internet marketing for twelve years now, so it's easy for me to write about, and I will. What I've been thinking about non-stop for the last six months is entirely different: how can the internet be used to make the world a better place?

I know, it's a stupid question. It's too broad to be interesting. I could use some help, and that's one of the reasons I'm writing.

The first question has to be, what do I mean by better? Peace, Justice, the American Way? Well, sort of. How about: improving the environment, reducing poverty, promoting democracy, and building a more open and tolerant society? Those are the moral criteria Friedman uses in "The Moral Consequences of Economic Growth" and since I like his conclusion--that economic growth can be a force for social betterment--I'm going to use them.

Also, I am generally more interested in the for-profit model than the not-for. The fundamental flaw in most not-for-profits' business model is that (i) they need to raise money to fulfill their mission, and (ii) raising money isn't their mission. They have two separate missions that require two completely different sets of expertise. This is the kind of problem that I used to red-flag when I was a venture capitalist: it's hard enough to become good at one thing, becoming good at two things squared the risk.

In my mind, the ideal pro-social good company makes money by doing good. There is only one mission. It seems to me that the efficiency gains inside the company from spending hard-won dollars on advancing the cause rather than trying to raise still more money are pretty high. I've been talking to or working with several companies over the past few months that do exactly this, and so far I've been blown away by their ideas and execution.

This isn't to say that certain non-profits (Donors Choose is a great example) aren't doing an excellent job leveraging the internet to make the world better. They are. It's just not my focus.

My current conundrum is drawing a heavy theoretical line between creating value by doing good and monetization. That is, the activities I described above as "Better" all create value for people and societies. The best for-profit companies are the ones that create the most value. So, why has the focus on doing good been primarily that of the not-for-profit sector?

2 comments:

Janet D. Stemwedel said...

If you can figure this one out, you win. The challenge seems to be that the way things typically run, making money is often in tension with generating other kinds of value (like a democracy that represents the people rather than the corporate donors, a health care system where it makes sense to give sick people treatment, a scientific community that sees itself united in the project of building reliable knowledge rather than locked in a struggle for scarce funding and journal pages, etc.).

Whenever sacrificing another interest improves the bottom line, there's a good chance that interest will get sacrificed. How do you change the set up so that the bottom line depends on looking after the other interests (making the money what it ought to be, of value as an instrument rather than as an end ion itself)?

josh reich said...

http://www.greendimes.com/

Nice to see that you are blogging!