Investing Journal

Creating a World Without Poverty: Social Business and the Future of Capitalism - by Muhammad Yunus

I listened to the unabridged audio CDs of Creating a World Without Poverty, in which Muhammad Yunus outlines his ideas for creating a new class of organizations called Social Businesses.  Yunus sees a problem with the current situation where an organization is either not-for-profit, or profit-maximizing.  He claims that those for-profit businesses that claim to also serve social needs will always be at the mercy of profit-demanding shareholders.

He says that what the world needs, is something that fits nicely into our capitalistic society.  He outlines the social business, which is essentially the same as a for profit enterprise, but instead of trying to make a profit, they try to break even.  He tries to make a case for a stock market, and for all business infrastructure to be created for Social Businesses.  Although he doesn't really explain how a stock market would work (maybe more like a bond market?), he really makes a good case for non-profit companies to be more like normal businesses, creating products, marketing them, and being self-sustaining.

The book outlines Grameen's work with Danone to create Gameen Danone, a social business dedicated to provide better nourishment to poor children.  The book is a little slow, compared to his amazing prior work, Banker to the Poor.  That said, the idea outlined in this book to create Social Businesses is one that will probably significantly change the world.  Just imagine if one suggestion he mentions in the book happened:  If Warren Buffett spent some of his money he plans on donating, and obviously his wealth of knowledge in the insurance industry, to establish a Social Business to provide health care to the millions of Americans who don't have any.  Good luck Muhammad on promoting your idea.  I'm totally behind it.

Banker to the Poor: Micro-Lending and the Battle Against World Poverty - by Muhammad Yunus

I just finished the unabridged audio version of Banker to the Poor and I highly recommend it.  The book details how in 1983 Yunus established a micro-loan bank devoted to the serving the poorest people in Bangladesh.  Yunus has amazing stories to tell of the history of Bangladesh, including its oppressive culture, the struggles facing the poorest people in the world, and the role of government in his efforts.

He tells about how he realized that many of the poorest people just needed a few cents to get out of their current situation of borrowing from loan sharks, and buying meager amounts of food with any money earned after paying back the loan.  Most of the borrowers at his Grameen bank are women, who otherwise would not be earners for their families.  Yunus found that giving to women helped the state of families much more than giving money to men, who tended to waste the money or spend it on themselves.  Lending to women presented a major challenge in Bangladesh because the women followed the tradition of Purdah, which limited their ability to do business.  He got help from students at the local University where he worked, and started on his quest to convince them to take small loans that would enable them to dramatically improve their economic situation.

Yunus's experience with government has led him to believe that it should be as small as possible, and that non-profit organizations should be the preferred mechanism of helping the poor.  He found that the government was very frequently a hindrance to all the good he wanted to do.  Besides that, he found that the programs that they implement tend to not be targeted exclusively at the poorest, and when that happens, the non-poor tend to maneuver to receive the majority of benefits, and leave nothing for the poor.

I'd like to have seen more statistics, and implementation details, but that's not really the purpose of the book.  Apparently 94% of clients are women, and repayment rates are nearly 100%.  Loans are only given to individuals who've formed a group of 5 people who reinforce re-payment among themselves.

Yunus closes with inspiring thoughts on our real ability to live in a poverty-free world.  He thinks that poverty belongs only in a museum, and that we should all work towards making sure that everyone has enough resources for their basic survival.  He's dissatisfied at the ways in which current aids to the poor are spent, and thinks that a market infrastructure should be built up to aid in finding the best ideas to support the poor.  Again, I highly recommend this insightful and inspirational look at the challenges and amazing results of the Grameen organization.

After working in MSN/Windows Live for nearly 5 years, and Windows Live ID for over 2 years, I've decided to transition to the Xbox console team. 

I've worked with quite a breadth of technologies at Microsoft: On the billing and subscription platform, I worked heavily with SQL databases, and with C# and xml tools.  Then on Windows Live ID, I was able to learn a lot about how to build a performant, scaleable service, and worked on the sign-in page (HTML, JS, CSS, C++), admin services (SOAP, C++), and Delegated Authentication (C#, ASP.NET).  I realized that my passion was around making sure users have great experiences.

One of my favorite books, Good to Great, talks about how when building a business (or following a career), you need to focus on the intersection of 3 circles: What you're passionate about, what you can be the best in the world at, and what you can make a lot of money doing.  As I looked at these three circles, and what they meant for Microsoft, and what they meant for me, I realized that Xbox was the perfect fit.

Today was my first day on the Xbox console team, where I'll be working on the UI and User Experience of the guide and dashboard.  I'm really excited to work on a product I love and that is best in class, and to be able to help make user experiences on the console even better.

Wikinomics - How Mass Collaboration Changes Everything - by Don Tapscott and Anthony Williams

I finished the unabridged audio CD version of this book recently.  In general I agree with the Amazon reviewers that this book covers the topic of collaboration much too superficially.  The book discusses topics such as Wikipedia, open source software (particularly IBM's use of them), InnoCentive, Boeing, and Amazon.

I've grown accustomed to reading more academic books, and particularly economic books which really use a lot of data to back up their conclusions.  This book really doesn't do anything of the sort, but instead seems to assume that since collaboration has worked in several recent cases, it's obviously the wave of the future.  It's not that I disagree with the conclusion, in fact, I agree with it, it's that the authors don't go to any lengths to actually prove the assertion.

I was surprised that the authors essentially dismiss non-open source software and how highly they praise IBM.  I think things are heading the direction of open source, but I would have liked to see a better discussion of the pros and cons.

Regarding Boeing, the authors raved about how much better the new business model is for the 787--how Boeing gets help from its partners to design parts rather than do all the specifications in house.  However, in reality this has led to the worst schedule slip in Boeing's history, and as I understand it, people internally aren't huge fans of the change because of the huge challenge in working with suppliers.  This challenge was not discussed.

The authors also cite EBay's purchase of Skype as proof of the importance of collaboration.  Well, since the book was released, EBay has pretty much admitted that buying Skype was a mistake.

In summary, this book does present some interesting facts that I wasn't aware of, such as Proctor and Gamble outsourcing 30% of the design for new products, or Gold Corp's idea to publish all its data to get people on the internet to help find the best places to dig for gold.  However, the book spends too much time looking at collaboration through rose-colored glasses, and spends too little time on solid evidences and conclusions to warrant a recommendation.  Despite the shortcomings of the book though, I definitely think it's wise to start looking for ways to encourage more collaboration in every business.  Either through accepting more input from outside the company, or just increasing collaboration inside a company.

While I sometimes say that I'd like to start my own business, sometimes it's pretty clear that if I am, I'm not going about it the right way.  After all, Hewlett and Packard started an electronics company without an idea of what products they would create.   I guess I think I could manage a fairly successful small business well, I'm just waiting for the right product to come along.  A successful business needs to fill a specific need in society, not necessarily create a new product, which is what I typically think about when starting a business.  Sometimes I think it'd be fun to own a small paper store, or laundry mat, to see if I really have business management skills.

Another great idea is to take an ok product, with a mediocre process around it, and improve the product and the process.  My friends just created a business around eye patches for kids.  They're making higher quality and more attractive patches, and selling them online and in doctor's offices.  Since they're relatively easy to make, once they really start selling, they'll be able to enlist the help of local teenagers in creating the simple product.  A business that scales at the rate of teenage labor is pretty good.  Not quite the margins of software, but without all the pesky disruptiveness.

We've had some small trials this week.

On Tuesday night, while getting ready for bed, Emma was playing in our house, and fell, catching herself with her hands, and broke her elbow.  Apparenly when kids fall on their hands, they don't break their hands or wrists, they break their elbows.  You couldn't see the fracture in the x-ray, and it must have been small, but they put her in a half-cast and sling anyway.  See pictures on flickr.  The emergency room was recently updated, and pretty nice, but it still took 2 hours from check-in to check-out, and it seemed to be a slow night anyway.

Thursday we had a non-stop flight to Salt Lake from Seattle that happened to arrive just at the same time as a blizzard.  They had us circle a few times, and I think they were going to have us approach to land, but ended up pulling up and diverted to Boise to refuel.  In all that turbulence, Emma, who's typically a great flyer, really started complaining.  We thought it was mostly lack of sleep, but then she threw up all over herself and me. 

We cleaned ourselves off with paper towels, and Emma changed into a clean set of clothes that we had handy.  I frequently get dizzy in flights and cars, and so I had to endure the 2 hour round-trip to Boise feeling terrible.  I was able to get off in Boise and buy a new T-shirt so I didn't stink too much.  We gave Emma some water, which prompted more vomiting, and we finally arrived in Salt Lake about 3 hours late.  FYI: We looked it up, and after vomiting, you shouldn't eat anything for 8 hours, and only have tiny amounts of water if you really need it.

Emma was feeling fine the next day, and is using her arm a lot more now so we'll try taking the cast off tomorrow.