<a href="http://www.businessinsider.com/the-conscious-investor" target="_blank" rel="noopener"></a> <ul><li>Ross Baird is the president of Village Capital and the author of the "The Innovation Blind Spot: Why We Back the Wrong Ideas―and What to Do About It."</li><li>Baird points out that only one percent of start-up investment goes to African Americans, only two percent of capital goes to women, and 80% of all funding goes to only three states. This leaves many entrepreneurs overlooked. </li><li>Baird says if you are an entrepreneur that wants to change the world then think small. He says pick a very specific problem that you see in your job, in your industry, in your neighborhood, and try and be excellent at solving that very specific problem. </li><li>Baird's interest in social entrepreneurship started when he was working in microfinance in India. He helps us understand when microfinance is beneficial to the community and when it becomes extractive.</li></ul>Following is a transcript of the video.Sara Silverstein: Tell me what you do at Village Capital.Ross Baird: So at <a href="https://vilcap.com/" target="_blank" rel="noopener">Village Capital</a>, we back entrepreneurs that are reinventing the system. You know we've got inequality at a 100-year high in our world. We're worried about the sustainability of our planet, we're worried about feeding a growing population, and we're backing entrepreneurs who have new ideas to solve some of those challenges that hit us in the face everyday.Silverstein: And are you focusing on the ideas that the entrepreneurs have or who the entrepreneurs are?Baird: I think, I think it's inseparable. You know we have a story I tell a lot. We have an entrepreneur name and he grew up an immigrant from Haiti. He moved here, age 11 and saw his mom get ripped off everyday by payday lenders, check cashers, people taking advantage of poor people like his family. He came here to New York, worked on Wall Street figured out how to <a href="https://www.lendstreet.com/about" target="_blank" rel="noopener">help poor and middle class families refinance their debts</a>, and he went out to raise a bunch of money and completely struck out.<div class="KonaFilter image-container display-table float_left"><div><div class="image on-image">JPMorganJerry Nemorin is founder of LendStreet</div></div></div>I said, "Jerry" - When I first met him, I met him a few years ago, I said, "Jerry, you've got a great idea solving a huge problem, where - what's happening?" He goes, "You know, the financial market works in patterns. I am a black guy, I come from South Florida, and I'm solving poor people's problems. I'm 0-3, you know."White guys in hoodies in San Francisco and New York do pretty well when it comes to raising money. We think that there are ideas that solve problems in people, places, industries we're not paying attention to and those are the entrepreneurs that we're trying to lift up and back.Silverstein: How did you get involved in this in the first place?Baird: So I started a company about nine years ago. I have always been an entrepreneur. I mean, every since I was a kid, I was running different hustles all the time. And I saw very often working - you know, I was living in India working for a start-up microfinance bank. And the microfinance industry is - $30 billion a year around the world is lent in $500 chunks to small businesses, near a 100% repayment rate. Totally transformed financial services in emerging markets. And the thing I saw in India was how businesses on the ground close to the problem can solve a lot of the problems that we have. And so I tried to take what I'd seen in the grassroots all around the world and apply it to the capital markets here where, you know, the distance from Wall Street to Newark might as well be half the world away even though it's only a couple miles.Silverstein: Is all microfinancing good? Is some of it bad? And how is it different from payday lending?Baird: Albert Einstein once said, "If I had an hour to solve a problem, I'd spend 55 minutes solving the problem and five minutes on the solution." You know -Silverstein: What does that mean?Baird: That means microfinance is a tool. All investing is a tool. Every microfinance bank, every bank is neither good nor bad, they're amoral. It's just what are people trying to do with it. I've seen microfinance banks that act in extractive ways and their primary goal is extract as much profit out of poor communities as possible. I've seen payday lenders do the same thing. I've also seen microfinance banks that are very good and say, "Our core goal is building wealth for the community and we've structured our business in a way that works for us." I was in India and there was a microfinance bank that was the fastest growing microfinance bank in India and they raised venture capital from Silicon Valley and they were pushed to grow 10 times faster. I would argue that because that happened they lost their impact. They started signing people up for loans who may not have needed them and you know, people had three or four loans at the same time and it - the bank grew unsustainably fast because profit dominated what they were trying to do and ultimately, the bank lost a lot of value because they lost a lot of customers and so it was an unsustainable way to operate a bank. I would say, you know, investing is neither good nor bad. It depends on what you use it for. Same thing with microfinance. Same thing, you know, there are people who lend in very poor communities who are very extractive. There are some lenders in poor communities that are payday lenders at good interest rates that are good. So I think you just have to look at what is this business trying to accomplish in addition to making money and evaluate it from there.Silverstein: And can you expand on the thesis behind<a href="https://www.amazon.com/Innovation-Blind-Spot-Wrong-Ideas_and/dp/1944648615" target="_blank" rel="noopener"> "The Innovation Blind Spot,"</a> behind your book?<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><a href="https://www.amazon.com/Innovation-Blind-Spot-Wrong-Ideas_and/dp/1944648615">Ross Baird</a></div></div></div>Baird: Yeah, so you know, going back to Jerry. 0-3 - he says, you know, as a black guy he has a hard time getting his ideas, his small little idea into the big market. One percent of start-up investment goes to African-Americans. Two percent of start-up investment goes to women. There are a lot of people who are overlooked. Jerry was from South Florida. He was trying to start his business in Central Virginia. Where you live matters. So roughly 80% of start-up investment goes to three states: New York, Massachusetts, California. If you're in Ohio or Florida or Nairobi or Mumbai, it's really hard to get your idea into the system. And Jerry said he was trying to solve poor people's problems. The biggest industries, the six biggest consumer industries: health, education, financial services, energy, agriculture and housing only make up 15% of the billion dollar start-ups that we've created. So we have a lot of money going to a few people and places and problems that are - make the lives of people who are doing pretty well more convenient, but the people working hard on the problems that really matter for the future of our society often have a really hard time getting a shot. And so "The Innovation Blind Spot" says here's how you can be, in your day-to-day life, more innovative. And here's how you can find ideas from the people and places and areas that you might not have otherwise thought of.Silverstein: And when you're talking about these entrepreneurs and start-ups, what size allocations are you making to them?Baird: So we will do, you know, $50,000-$250,000 investment in an entrepreneur who is solving a chronic problem that the market is overlooking.Silverstein: And how much have you put to work in these types of investments?Baird: So we've invested almost $10 million. <a href="https://vilcap.com/companies/" target="_blank" rel="noopener">We've invested in close to 100 companies</a> all over the world. And we found, we have a very different process for investing. We found very different results. So about 43% of our investment is in women compared to 2% in the mainstream market. About 34% are in people of color compared to 1%. Ninety percent are outside New York, Massachusetts, San Francisco, compared to 20%. So we've been able to get a lot of ideas out there and we're seeing some really exciting results.Silverstein: And can you make money investing in people and ideas that are making the world a better place? Baird: Yeah we are. I mean if you look at how our investments were doing and you looked at it blindly, we would, it would be a pretty promising - I mean, it's very early days. You don't want to declare victory before anything, but I think we're pretty excited about the results we have so far, even if you extract the mission for what we're doing. But I actually think our companies are performing well because of the mission they have. I mean everybody wants to work at a company whose values we believe in. Everybody gets more excited about investing or funding something that has what we believe in. So we think we've got a good business model with a very exciting mission, you're going to outperform over the long-term.Silverstein: And do you have any advice for people who might be coming out of school right now who want to be social entrepreneurs or want to be - who are capitalists that also want to improve the world?Baird: Yeah, you know, a lot of people think, "I want to change the world, bigger is better. I want to go, you know, to the biggest firm or the biggest city or whatever." And I would say the most impactful entrepreneurs I've seen embrace the mantra, small is beautiful. Pick a very specific problem that you see in your job, in your industry, in your neighborhood, in an issue that you care about and try and be excellent at solving that very specific problem. Because if you can change, you know, your line of your division at your first job, you can change your company, which changes your industry, which changes the world. Or if you can change your neighborhood or your block, you start to see a ripple effect. So I would say try and get as specific, and tangible, and small about the problem you're excited to solve, and your career will take you in really exciting directions.

80% of start-up money goes to three states - here's what one visionary is doing to help spread the wealth

Daymond John reveals how he started a $350 million business out of his mom's house, became a 'Shark Tank' star, and gained a new perspective after beating cancer

<h4> </h4>
<h4>Are startups just for workaholic white male lumpen-preneurs?</h4>
A YEAR AGO Jody Sherman shot himself. His online shop, Ecomom, which sold eco-friendly and health products for children, was running out of cash. A few weeks later the business closed its virtual doors. A new owner relaunched it in June.
There is no evidence that entrepreneurs kill themselves more often than people in other high-pressure jobs, but the news of Sherman's death (which coincided with the suicide of Aaron Swartz, an internet activist) led to a rare moment of self-examination in the startup sphere. In a blog post Jason Calacanis, an outspoken serial entrepreneur, mused whether there was a need to examine if "the pressures of being a founder, the pressure of our community's relentless pursuit of greatness, in some way contributed to their deaths".
These pressures form part of the darker side of startups, along with concerns that startup communities, though very international, are made up largely of youngish white males who are not so much entrepreneurs as new kinds of workers. A further worry is that software--and hence startups--are eating not just the world but jobs, too.
Ask founders why they put up with the hardships, and they reply with predictable enthusiasm. "I want to change the world," says Daan Weddepohl, chief executive of Peerby, a service based in Amsterdam that could indeed make a difference if it takes off. It lets people borrow things they need (a drill, a lawnmower, an icemaker) from their neighbours within half an hour.
But beneath this fervour there is often a world of uncertainty. In essence, a founder's job is to create something out of nothing, which often means convincing people that there may be something in their idea. "Building a startup is all about building credibility--with investors, partners, customers, the media," explains Mr Weddepohl, a recent TechStars alumnus.
A big part of that is hype. "Everything is always awesome, but even startups considered successful tend to have huge issues," says Andreas Klinger, an Austrian who co-founded a (now defunct) London-based online shop for designer clothing.
What makes being a founder stressful is being on an emotional roller-coaster all the time. "In the morning you feel everything is on the right track and in the evening everything seems in the gutter," says Shawn Zvinis, the co-founder of Tab, a London startup which closed in December. "There are days you don't want to get out of bed. And you ask yourself: does changing the world feel like this?"
For most founders money is a constant worry. Investors often give them only relatively small sums at a time. To keep costs down and make sure that employees get paid, they draw little money for themselves and live as cheaply as they can. "If you haven't missed payroll at least once, you are not a real entrepreneur," goes a startup mantra.
Since many founders have no life outside their company, they consider it their family. That makes it traumatic when a long-standing employee or, worse, a co-founder leaves. "It's like getting divorced," says Mr Weddepohl, who has twice parted company with a co-founder.
Attitudes to failure vary by culture, though it is always a personal disaster when, after years of hard slog, a founder realises that the dream is over. But many still want to give it another try. "It's part of the game. You have to ask yourself what you have learned and move on," says Gaith Kawar, a Jordanian serial entrepreneur who is on his seventh startup.
Some experiment not only with new services but new work patterns too. At Jimdo, a firm based in Hamburg that makes it easy to build websites, employees came up with an internal set of rules to keep their to-do list manageable and ensure they are "well-rested". This does not seem to have hurt the firm: it has helped customers to set up 10m websites from offices in San Francisco, Tokyo and Shanghai and employs 170 people.
<h3>One-track minds</h3>
But on the whole the startup world, even more than other forms of business, leaves little room for life beyond work. That may be one reason why only about 10% of founders are women, according to Compass, a startup research outfit. It does not help that there are hardly any female role models, and that many schools do not encourage girls to take an interest in computing.
The financial side is similarly male-dominated. In 2013 less than 5% of IT investments were made in firms founded by women, according to PitchBook, a research firm (see chart 4). And it is not just women who are underrepresented. Founders may come from all over the world, but most of them are white or pale.
<div class="KonaFilter image-container display-table"><div><div class="image">The Economist</div></div></div>
The lack of ethnic diversity is particularly noticeable in accelerators, but their managers say there is little they can do about it: the people who present themselves are "a bunch of white and Asian dudes", notes Mr Graham, the founder of Y Combinator. This seems likely to limit innovation. Still, a growing number of investors now at least recognise that there is a problem. Having found that only a handful of its applicants were female, Entrepreneur First, a London accelerator for individual founders, decided to launch CodeFirst:Girls, a series of free courses to teach female students how to code. Among the latest batch, four out of 31 founders are women, which is still not great.
A more diverse group of founders might develop a more mature self-image. For the moment many see themselves as the next Steve Jobs or Mark Zuckerberg, but last year Venkatesh Rao of Ribbonfarm, a consultancy, offered a different narrative. "Entrepreneurs are the new labour," he claimed in a series of well-argued blog posts with the same title. And it is true that many founders do indeed live on "rent and ramen [noodles]". But Mr Rao's analysis goes deeper. He sees a connection between today's entrepreneurs and the artisan steelmakers of the late 19th century. As the market matured, he explains, the Victorian steelworkers' knowledge became commoditised, making them the nucleus of the new working class. Something similar is now happening to founders, Mr Rao claims.
The lean startup methodology, the accelerators and the standardised term sheets for investments are all signs that the knowledge required to run a startup is becoming codified and commoditised. This has tilted the balance of power between investors and entrepreneurs, he writes. "Investors have won, and their dealings with the entrepreneur class now look far more like the dealings between management and labour."
Many founders will end up being "acqui-hired", with a large tech company buying a startup not for the technology but for the team, reckons Mr Rao. That may be no bad thing: a good engineer will quickly get a job that he would have taken twice as long to reach on a conventional career ladder, as well as a significant chunk of cash. But it puts a different light on startups and accelerators, suggesting that they are less about identifying the next Mr Zuckerberg or Mr Jobs than about providing a new system to train workers for the knowledge economy.
<h3>A trickle of jobs</h3>
Can founders not at least feel good about themselves as job creators? Between 1990 and 2011 information and communication technology (ICT) businesses in America aged between one and five years increased their workforce by 10% a year, according to a recent study by the Ewing Marion Kauffman Foundation. But since most of these businesses are small, so are the absolute numbers of jobs they generate. Although startups often "scale" quickly, they rarely become "massive", says Erik Brynjolfsson of MIT Sloan School of Management.
In a new book, "The Second Machine Age", co-written with a colleague, Andrew McAfee, Mr Brynjolfsson contrasts Eastman Kodak, founded in 1880, with Instagram, a photo-sharing app only 18 months old that was bought by Facebook for about $1 billion in 2012. In its heyday Kodak employed over 145,000 people and indirectly provided work for thousands more. It filed for bankruptcy a few months before Instagram was sold. At the time of the sale the photo-sharing firm had 130m customers but just 16 employees. Even Facebook, which now boasts more than 1.2 billion users, employs only about 5,800 people.
Yet it would be wrong to conclude that the entrepreneurial explosion will lead to more unemployment, argues Mr Brynjolfsson. Startups may disrupt existing industries, but they often create the foundation for many new jobs outside their own business. On Etsy, an online marketplace for homemade items, more than 1m people have opened stores to sell their wares. On eLance and oDesk, two freelancing sites, 2.3m and 4.5m members respectively are offering their services.
Most important, digital technology has created endless possibilities for new products. "The answer is not less entrepreneurship but more," says Mr Brynjolfsson. "We are in no danger of running out of combinations to try." That cornucopia is now extending from software to hardware.
Click <a href="https://subscriptions.economist.com/nwcd">here</a> to subscribe to The Economist

The Sad Truth About Working At A Tech Startup

Are startups just for workaholic white male lumpen-preneurs?
A YEAR AGO Jody Sherman shot himself. His online shop, Ecomom, which sold eco-friendly and health products for children, was running out of cash. A few weeks later the business closed its virtual doors. A new owner relaunched it in June.
There is no evidence that entrepreneurs kill themselves more often than people in other high-pressure jobs, but the news of Sherman's death (which coincided with the suicide of Aaron Swartz, an internet activist) led to a rare moment of self-examination in the startup sphere. In a blog post Jason Calacanis, an outspoken serial entrepreneur, mused whether there was a need to examine if "the pressures of being a founder, the pressure of our community's relentless pursuit of greatness, in some way contributed to their deaths".
These pressures form part of the darker side of startups, along with concerns that startup communities, though very international, are made up largely of youngish white males who are not so much entrepreneurs as new kinds of workers. A further worry is that software--and hence startups--are eating not just the world but jobs, too.
Ask founders why they put up with the hardships, and they reply with predictable enthusiasm. "I want to change the world," says Daan Weddepohl, chief executive of Peerby, a service based in Amsterdam that could indeed make a difference if it takes off. It lets people borrow things they need (a drill, a lawnmower, an icemaker) from their neighbours within half an hour.
But beneath this fervour there is often a world of uncertainty. In essence, a founder's job is to create something out of nothing, which often means convincing people that there may be something in their idea. "Building a startup is all about building credibility--with investors, partners, customers, the media," explains Mr Weddepohl, a recent TechStars alumnus.
A big part of that is hype. "Everything is always awesome, but even startups considered successful tend to have huge issues," says Andreas Klinger, an Austrian who co-founded a (now defunct) London-based online shop for designer clothing.
What makes being a founder stressful is being on an emotional roller-coaster all the time. "In the morning you feel everything is on the right track and in the evening everything seems in the gutter," says Shawn Zvinis, the co-founder of Tab, a London startup which closed in December. "There are days you don't want to get out of bed. And you ask yourself: does changing the world feel like this?"
For most founders money is a constant worry. Investors often give them only relatively small sums at a time. To keep costs down and make sure that employees get paid, they draw little money for themselves and live as cheaply as they can. "If you haven't missed payroll at least once, you are not a real entrepreneur," goes a startup mantra.
Since many founders have no life outside their company, they consider it their family. That makes it traumatic when a long-standing employee or, worse, a co-founder leaves. "It's like getting divorced," says Mr Weddepohl, who has twice parted company with a co-founder.
Attitudes to failure vary by culture, though it is always a personal disaster when, after years of hard slog, a founder realises that the dream is over. But many still want to give it another try. "It's part of the game. You have to ask yourself what you have learned and move on," says Gaith Kawar, a Jordanian serial entrepreneur who is on his seventh startup.
Some experiment not only with new services but new work patterns too. At Jimdo, a firm based in Hamburg that makes it easy to build websites, employees came up with an internal set of rules to keep their to-do list manageable and ensure they are "well-rested". This does not seem to have hurt the firm: it has helped customers to set up 10m websites from offices in San Francisco, Tokyo and Shanghai and employs 170 people.
<h3>One-track minds</h3>
But on the whole the startup world, even more than other forms of business, leaves little room for life beyond work. That may be one reason why only about 10% of founders are women, according to Compass, a startup research outfit. It does not help that there are hardly any female role models, and that many schools do not encourage girls to take an interest in computing.
The financial side is similarly male-dominated. In 2013 less than 5% of IT investments were made in firms founded by women, according to PitchBook, a research firm (see chart 4). And it is not just women who are underrepresented. Founders may come from all over the world, but most of them are white or pale.
<div class="KonaFilter image-container display-table"><div><div class="image">The Economist</div></div></div>
The lack of ethnic diversity is particularly noticeable in accelerators, but their managers say there is little they can do about it: the people who present themselves are "a bunch of white and Asian dudes", notes Mr Graham, the founder of Y Combinator. This seems likely to limit innovation. Still, a growing number of investors now at least recognise that there is a problem. Having found that only a handful of its applicants were female, Entrepreneur First, a London accelerator for individual founders, decided to launch CodeFirst:Girls, a series of free courses to teach female students how to code. Among the latest batch, four out of 31 founders are women, which is still not great.
A more diverse group of founders might develop a more mature self-image. For the moment many see themselves as the next Steve Jobs or Mark Zuckerberg, but last year Venkatesh Rao of Ribbonfarm, a consultancy, offered a different narrative. "Entrepreneurs are the new labour," he claimed in a series of well-argued blog posts with the same title. And it is true that many founders do indeed live on "rent and ramen [noodles]". But Mr Rao's analysis goes deeper. He sees a connection between today's entrepreneurs and the artisan steelmakers of the late 19th century. As the market matured, he explains, the Victorian steelworkers' knowledge became commoditised, making them the nucleus of the new working class. Something similar is now happening to founders, Mr Rao claims.
The lean startup methodology, the accelerators and the standardised term sheets for investments are all signs that the knowledge required to run a startup is becoming codified and commoditised. This has tilted the balance of power between investors and entrepreneurs, he writes. "Investors have won, and their dealings with the entrepreneur class now look far more like the dealings between management and labour."
Many founders will end up being "acqui-hired", with a large tech company buying a startup not for the technology but for the team, reckons Mr Rao. That may be no bad thing: a good engineer will quickly get a job that he would have taken twice as long to reach on a conventional career ladder, as well as a significant chunk of cash. But it puts a different light on startups and accelerators, suggesting that they are less about identifying the next Mr Zuckerberg or Mr Jobs than about providing a new system to train workers for the knowledge economy.
<h3>A trickle of jobs</h3>
Can founders not at least feel good about themselves as job creators? Between 1990 and 2011 information and communication technology (ICT) businesses in America aged between one and five years increased their workforce by 10% a year, according to a recent study by the Ewing Marion Kauffman Foundation. But since most of these businesses are small, so are the absolute numbers of jobs they generate. Although startups often "scale" quickly, they rarely become "massive", says Erik Brynjolfsson of MIT Sloan School of Management.
In a new book, "The Second Machine Age", co-written with a colleague, Andrew McAfee, Mr Brynjolfsson contrasts Eastman Kodak, founded in 1880, with Instagram, a photo-sharing app only 18 months old that was bought by Facebook for about $1 billion in 2012. In its heyday Kodak employed over 145,000 people and indirectly provided work for thousands more. It filed for bankruptcy a few months before Instagram was sold. At the time of the sale the photo-sharing firm had 130m customers but just 16 employees. Even Facebook, which now boasts more than 1.2 billion users, employs only about 5,800 people.
Yet it would be wrong to conclude that the entrepreneurial explosion will lead to more unemployment, argues Mr Brynjolfsson. Startups may disrupt existing industries, but they often create the foundation for many new jobs outside their own business. On Etsy, an online marketplace for homemade items, more than 1m people have opened stores to sell their wares. On eLance and oDesk, two freelancing sites, 2.3m and 4.5m members respectively are offering their services.
Most important, digital technology has created endless possibilities for new products. "The answer is not less entrepreneurship but more," says Mr Brynjolfsson. "We are in no danger of running out of combinations to try." That cornucopia is now extending from software to hardware.
Click <a href="https://subscriptions.economist.com/nwcd">here</a> to subscribe to The Economist

You Searched For "Entrepreneurship mantra" and got 4 results

80% of start-up money goes to three states - here's what one visionary is doing to help spread the wealth

Kara Chin,Jacqui Frank,Sara S…

Daymond John reveals how he started a $350 million business out of his mom's house, became a 'Shark Tank' star, and gained a new perspective after beating cancer

Richard Feloni,Daniel Richards

The Sad Truth About Working At A Tech Startup

Business Insider

The Dark Side Of Tech Startups

The Economist