just rick.

The meaningless debate of whether MBAs can be entrepreneurs.

The MBA bashing by the startup community has been in effect for years. The most recent post I read was Howard Tullman’s A/B Testing Is So Yesterday—and So Is Your MBA. And like the others, it reads like click bait.

Why? Because it is a manufactured issue. Master of Business Administration programs are not meant to create entrepreneurs. The majority of MBA students do not enroll to found a company. They want to join investment banks, private equity firms, consultancies, and/or consumer product brands. In fact, over 89% of students at UPenn’s Wharton, Stanford GSB, and Indiana’s Kelley find placement in corporate America. Hence, the curriculum is designed to create super analysts and managers. And against that objective, the curriculum is effective.

Entrepreneurship is blind to a person’s degree. Founders come from all educational backgrounds, professional domains, and geographies. It is not a career you apply for; it is a career that seizes you through the pursuit of problem solving. And as long as business schools exist, entrepreneurs will come from MBA programs as well. It may be a former consultant MBA looking to make a better pair of pants or an International Studies MBA major looking to improve the way payments are made online.

The real debate is if MBA programs can strengthen entrepreneurs.

Tullman says probably not. He believes business school programs will evolve in a reactive manner. He adds that business schools will play catch up through:

“…frantic, and utterly expected and lemming-like responses by adopting the best practices from the outside world and adding courses in stats, data science, and A/B testing.”

My co-founder at Dashfire, Nick, received an MBA from Indiana’s Kelley School of Business. He concentrated in Decision Sciences and focused on simulation, split testing (the 1990s version of A/B testing), neural networks, data mining, real options, and optimization.

Nick graduated in 2002.

These disciplines are offered to prepare students to make risk reducing decisions at their future employers. That’s why Google has an “MBA preferred” for its highest paying non-engineering positions.

Though assumed to chasing huge risks to start world-changing companies, the best entrepreneurs don’t seek risk. They diligently seek to mitigate it. Hence, the risk framework taught in business schools strengthens entrepreneurs.

Further, since 2003, 12 of 39 or roughly 31% of all unicorns (startups with a valuation >$1BN) have an MBA founder. In 2014, 36 of the Fortune 100 CEOs had MBAs. The curriculum seems to be working in and out of the board room.

Meanwhile, MBAs are adding to the framework. The professor roster is regularly supported by entrepreneurs serving as adjuncts. Founder and VCs alums participate in classes, office hours, and pitch competitions. Endeavors like iLab at Harvard Business School or Chicago Booth’s New Venture Challenge offer funding through venture challenges, provide co-working space, and access to startup workshops. In Chicago, Northwestern’s Kellogg and Chicago Booth’s logos shine brightly as inaugural tenants of 1871, the city’s premier startup co-working space.

I received this email today from Handy, an on-demand booking service for home cleaning:

We have entered into the new deal economy. Deeply discounted service offerings that are now delivered on demand instead of to your inbox.

But daily deals — in their original form — failed.

It started five years ago with Groupon. Subsequently thousands of clones emerged. Groupon for golf. Groupon for colleges (we tried to launch one). Google tried to [unsuccessfully] buy Groupon so instead proceeded to launch Google Offers. Facebook responded with an Offers platform of its own. Amazon invested in LivingSocial and doubled down with a native deals platform. Even the New York Times launched a deal site.

And then it stopped working. Excitement for 50% off was replaced by deal fatigue. Deals became a commodity. The only way to compete with the increasing supply was with deeper discounts. Discounts that were unprofitable and unsustainable.

Fast forward to today, we see a similar trend in the on-demand economy. The drivers are the same: Uber is killing it and the barriers-to-entry for new startups are low. Companies can tap into contract workers’ networks and leverage existing user lists or Facebook for distribution with limited capital investments, which has resulted in on-demand laundry, dry cleaning, dog walking, and massages. Excluding Uber, they are services of convenience. A nice-to-have. But you rarely need them urgently or use them frequently, so you are unlikely to pay a premium over existing solutions or for recurring cleanings.

In mid-November, we learned that Fidelity marked down the value of its Snapchat investment by 25%, which instantly reignited the tech bubble conversation. We may be in a bubble, but this event is not an indicator. What this mark down does reveal is a shift in investment strategy for large investment funds.

“Fidelity lowered the value of its stake in photo-sharing app Snapchat by 25% … to $22.91 per share … from $30.72 per share as of [prior internal valuations in] June and March of 2015. Snapchat was valued at $16 billion in May, according to The Wall Street Journal.”

In the past few years, many high growth startups have delayed going public in favor of private capital to allow them to grow without the scrutiny of public reporting. As a result, Fidelity, who invested in both Google’s (up 1,400%+) and Facebook’s (up 180%+) IPO, has begun to invest in later stage private rounds to achieve comparable returns from tech startups. The 25% premium that Fidelity paid was the cost for access to Snapchat’s latest round of funding and potential Facebook like returns.

Had Fidelity not participated in this financing, their next opportunity to invest may not be until Snapchat’s eventual IPO, which could be 2 times the current price. If Fidelity believes that Snapchat is worth $150.00 per share, investing now — even if at a premium — is worth the upside versus waiting for an IPO.

Importantly, Fidelity takes a long term view on investing; they expect investments to generate an above market return over an extended period of time. They are able to withstand short term volatility because they believe in the fundamentals of the business and related industry (disappearing videos turned ad story model for millennials!). Their recent markdown of Snapchat is a result of their required quarterly mark to market valuation on all of their securities. It is not necessarily a reflection of their view of Snapchat’s long term value.

Extending this thinking to Facebook, Facebook endured early stock volatility — effectively a mark down — and now is generating above market returns.

Facebook’s public mark down.

Further, had Facebook delayed its IPO in favor of private capital, many investors like Fidelity would have missed out on the recent stock appreciation. Snapchat may never become Facebook, but Fidelity believes this company will last for more than a snap.

Maybe. Maybe Not.

The Wall Street Journal reported that Airbnb is closing an uber financing round of $1BN at a $24B valuation.

A valuation that factors in a projected loss of $150M and estimates revenue of $900M in 2015. Tech bubble? Maybe.

WSJ compares AirBnB to Marriott, specifically citing that Airbnb’s valuation is comparable to that of the hotel giant. Marriott is currently trading at an enterprise value of $25BN (Marriott shares x share price + net debt) after generating $13BN of revenue and earning $1.5BN of EBITDA in 2014.

Marriott’s revenue is 1,344% higher than Airbnb. Tech bubble? Maybe.

Investors in public company stocks bet on the future growth of the underlying company. Their investment purchases a portion of the company’s future earnings. As such, expected growth opportunity is a large contributor to price appreciation. Marriott operates over 714K hotel rooms that have a74% occupancy rate (193M total nightly bookings). Airbnb had 37M nightly reservations in 2014, less than 20% of Marriott.

However, for Marriott to grow 10%, they would need to increase prices (which could decrease occupancy), increase occupancy (by decreasing prices), or add more rooms (via acquisition or capital/time intensive build-out). Expensive.

Meanwhile, Airbnb grew 300% in 2014, driven by their organic brand awareness, two-sided marketplace supplying new customers, and cheap customer acquisition. If it grows at just under half of its current rate, it will surpass Marriott nightly bookings in 2 years with only a fraction of the overhead. Moreover, Airbnb is creating a new market. Not only is it shifting market share away from the incumbents, but it is also creating inventory in places where it previously didn’t exist (see: Bedford-Stuyvesant and Harlem), something VRBO/Homeaway missed out on by targeting extended vacations. By expanding the market of users, Airbnb owns a larger share of the growth opportunity in its industry.

Back to the financials: Marriott grew EBITDA by 15% in 2014. Extending this growth through 2020, Marriott’s will expect to earn $3.4BN of EBITDA. To benchmark “price” against Airbnb (and other hospitality / lodging companies), we can take their enterprise valuation of $25BN over their 2020 EBITDA of $3.4BN, which results in a 7.4x enterprise value / EBITDA. According to the WSJ, Airbnb is projecting $3.0BN of EBITDA in 2020. Their current valuation of $25BN represents an 8.0x enterprise value / 2020 EBITDA multiple, which is line with Marriott’s multiple.

If Airbnb and Marriott are priced the same, could we consider Airbnb’s valuation relatively cheap given the growth opportunity?

The Airbnb and shared economy investors certainly think so. And Marriott investors? Here is what they are holding on to:

(1) Marriott (and other hospitality brands) have incredible lobbying power that will continue to invest in the enforcement of regulation against Airbnb.

(2) Apartment buildings will enforce sub-leasing restrictions.

(3) Airbnb currently has no physical asset value; Marriott and others have significant real estate / asset value (much of which may be depreciated off the books for tax purposes but still carry significant value).

(4) Marriott can fire sale real estate for cash. Airbnb can’t fire sale users for cash

(5) Airbnb growth will slow and Marriott is a better long-term (and safe) bet because:

That Airbnb’s revenue and profitability projections are wildly wrong.

That Airbnb will not turn the corner to profitability.

That Airbnb will face increased competition from Homeaway/VRBO or newcomer given the software barrier to entry.

It’s more than just table stakes.

I’m hearing increasingly more dialogue about value-add investing (or maybe that’s just from reading every post in my daily Mattermark emails). But there doesn’t seem to be a consensus yet on what value-add is. So, here’s how I build-up value-add investing:

Investors: Invest capital in exchange for equity (or convertible debt) of a company.

Passive Investors: Investors + crossing your fingers.

Active Investors: Passive Investors + periodic strategic guidance in the their domain/industry of expertise, networking for recruiting/sales/partnerships.

Value-add Investors: Active Investors + providing constant leadership / expertise in 1+ domain (tech, recruiting, marketing, enterprise sales, social, etc.) to extend a founding team’s capacity.

Why on-demand marketplaces need urgency.

Jeremy Levine and Rafi Syed recently posted about the nascent opportunity that remains in unbundling horizontal marketplaces (Amazon, Craigslist) into distinct verticals (taxis, home cleaning, shared rentals). This opportunity is illustrated through the now-famous craigslist defragmentation pitch deck slide:

Sourced from http://www.leighdrogen.com/the-law-of-unbundling/; Originally created by Andrew Parker

The proliferation of the vertical marketplaces is only just beginning, specifically in the on-demand verticals. But as more entrants attack the same on-demand niches (see: home cleaning), these companies will inevitably sacrifice margin to win on price, thereby limiting the market opportunity. I believe that the ultimate differentiator for dollar opportunity is not in the vertical, but the magnitude of urgency within that vertical. Let’s explain through a base case using Uber:

Drivers are losing money (gas, mileage, car depreciation, opportunity cost) for every mile they drive with an unoccupied vehicle

Meanwhile, customers are actively searching for on demand services because they feel inconvenienced and/or desperate (e.g., late, cold, inebriated, stranded, etc.)

As my partner at Dashfire, Kelsey, points out, “both sides need the other urgently” thereby creating a desperate demand for the offering. Desperate demand allows for increased (or surge) pricing and an instant multiplier on the revenue opportunity.

We supported the launch of an on-demand home cleaning company in 2012 called LoClean. We saw great acquisition economics, but learned quickly that price not convenience was the ultimate driver(1). This is evident in Handy and Homejoy; both have dropped prices over fifty percent the past few years. There are certainly times when my home is a mess, I need to have a shirt dry cleaned(2) for a meeting tomorrow, or I’m too lazy to drive to the grocery store. But what is the maximum multiple I would pay for the immediacy of having HomeJoy, Washio, or Instacart serve me? I’d likely pay 1.5x the $50 to get the home clean, but I’m better off doing it myself than paying 3x.

The pricing power Uber has achieved as compared with most “Uber For X” is the difference between convenience and desperation. Convenience has a limit. Desperation does not. The repercussion cost — when the outcome cost no longer outweighs the service price multiplier — is much lower for home cleaning than for urgent transportation, which is far more frequent. I would pay 2x if I need a home cleaned today because it’s convenient. But if I’m late for an international flight, I will accept a much higher surge multiplier because the consequence is far more expensive. The desperation / surge multiplier allows for exponential market size increase. What vertical is next?

(1) The other decision elements in marketplace economics are frequency (you need a cab more often than you need dry cleaning), quality and time. Take vacation planning on AirBnB as it relates to quality and time. AirBnB wins b/c it provides a high quality user experience, low cost optionality, and review-supported high-quality staying experience. There isn’t a desperation or urgency to make a decision, so you can read reviews, make inquiries, and price compare.

Today, we are honored to announce the acquisition of Artifact Uprising, a Dashfire portfolio company, by VSCO.  There is no singular path for startup success, just a number of right paths; most of which are celebrated as successful in hindsight. The founders of AU, Jenna, Katie, and Matty, paved their own path. In fact, had they shared their roadmap with the startup community, it would have likely received the standard “just what the world does not need, another photo book company” commentary. But AU didn’t follow the prescriptions of others. They were motivated to inspire their followers to be story tellers – to get off their devices and into their lives. And they did so by creating beautiful products that were built with purpose and passion. The products evangelized the creative community, and AU reciprocated by loving their customers with proactive support and engaging content. They infused sustainability in their products and invested back in their community, not for recognition, but but responsibility. The AU brand became both inspirational and aspirational and served as a barrier to imitators.

The Artifact team built a rocket that fueled its own impressive growth.  But AU had the self-awareness to realize that joining VSCO’s team would allow them to accelerate the pursuit of their purpose and their mission. Jenna, Katie and the AU team will stay on board and, together with VSCO, will continue to pour every bit of passion and heart into Artifact Uprising – the only way they know how. Here is AU’s perspective.  And VSCO’s.

I am grateful to have been on this journey with AU for the past 2 yearsThe effort has been exhilarating, demanding, and rewarding. I’m appreciative for the partnership we have had with Jenna and her team. Enabling AU is a true testament to the Dashfire model. And I’m perpetually thankful for Nick and my team – FarShore, Kelsey, and our investors at Dashfire – for providing Artifact the capacity they needed to blaze their own path.

Here is to bigger and better!

I love accelerators.  I have witnessed their impact first hand on Dashfire startups and as a mentor for TechStars, DreamIt, and Impact Engine companies.  These highly selective programs enable early stage startups through mentorship, networking, and fundraising to leading angels and VCs.  AirBnB, Dropbox, and Digital Ocean are just three of the many extraordinary accelerator graduates. These successes have led to an increased demand from later stage startups for these programs, but at the same terms accelerators were offering to less proven companies.  It’s an economic no-brainer for accelerators, but has left earlier stage startups with less access to the proven accelerator framework.

In 2012, Illinois State students, Mike Shannon and Kasey Gandham, founded Packback Books, an on-demand e-textbook rental platform.  Mike and Kasey knew that they didn’t have the prerequisites for an accelerator.  So they created their own.  And their throwback, pound-the-pavement style worked.  In the time since, they have partnered with 7 publishers, created 13 Chicago-based jobs, partnered with 100 brand ambassadors, and raised money from Mark Cuban after starring on Shark Tank.

Here’s how they self accelerated:

Accelerators generate networking opportunities. Accelerators provide young companies and entrepreneurs with access to influencers in the space. Kasey and Mike researched relevant Chicago influencers on LinkedIn.  They snuck into 1871 and waited for these influencers to leave their office before approaching them.  While they faced awkward stares and rejections, many influencers appreciated their hustle and took the meeting.

Accelerators facilitate key hires and partners.  Just an additional step to networking.  Accelerators identify personnel and strategic needs, then introduce the individuals to meet said needs. Kasey and Mike built a robust advisory board that led to the introduction of their current CTO and law firm.

Accelerators “open doors” faster.  The accelerator network includes corporate executives who can make introductions to corporate or strategic partners. Kasey and Mike opened their own doors.  They leveraged their .edu emails to convince the President McGraw Hill to attend an event they hosted at Illinois State University.  After pitching him on Packback and negotiating a pilot, they used this milestone to gain the audience of other publishers.

Accelerators offer office hours with verticalized mentors. Mentors provide companies with feedback on their respective trade: sales, marketing, design, development, etc. Recognizing that their key limitations were on customer insights and technology, they partnered with Leo J. Shapiro to facilitate focus groups and Dashfire for product development.

Accelerators facilitate fundraising through demo day.  Angel and venture capital investors listen to pitches from each batch and are prepared to make investments. Kasey and Mike met with over 100 investors and parlayed some early wins into larger commitments.  And then they created their own demo day.  On Shark Tank.

Want to learn more about self-acceleration? Go stalk Kasey & Mike outside their office.  It just might work.

  Robert Pera (bottom right)- Team owner is 36 years old and founder of Ubiquiti Networks. The one time Apple employee became a billionaire when the company went public two years ago. He has challenged Michael Jordan to a game of one on one and invited celebrities to join him in ownership such as. . .

Justin Timberlake (top left)- Pera brought Timberlake into the ownership group because he wanted a way to make court side seats more desired and Timberlake is a Memphis native. Justin and his wife Jessica sit court side to the games and then they go out on BEALE Street (there is a Biel/Beale joke but we can’t find it.)

Last Wednesday, I spoke to the inaugural Startup Institute class in Chicago about how to “introduce” themselves to startups.  This reminded me of an introduction I gave for Georgetown’s business school head, Dean David Thomas.  I’ve copied the intro below and included a few takeaways on what I did right and could have done better.

Be thoughtful.  Research your audience.

Be creative.  Following the herd doesn’t leave an impression.  Stand out.

Follow-up.  I’m writing this post over a year after I met Dean Thomas. Aside from a follow-up tweet he sent my way, my relationship with Dean Thomas doesn’t exist because I didn’t take the time to follow-up.  That’s my fault.

–

“Hi Everyone, my name is Rick Desai and I have the great privilege of introducing the Dean of our McDonough School of Business, Dr. David A. Thomas. Justine asked me to review Dr. Thomas’s profile.  I interpreted that as memorize his accomplishments and present them tonight.  That’s next to impossible. He’s done everything.  Dr. Thomas spent over 20 years on the faculty of Harvard Business School.  The H. Naylor Fitshugh Professor of Business Administration.  Directed HBS’s Organizational Behavior unit.  Dr. Thomas is widely published, having co-authored two books and over 60 case studies. He has been honored with a number prestigious awards and is widely regarded as a thought leader in organizational behavior and strategic human resource management.  As now he is guiding the MSB into the future.

Now, with all that said, I did want to get to know the “real” Dr. Thomas before introducing him today.  So I did a little internet recon.  Google through the interviews and profiles reiterated that Dr Thomas is an extraordinary leader.  LinkedIn provided his resume – and Facebook came up empty. And then I checked the last place I thought I would find our Dean: Twitter.  Lo and behold, Dean Thomas tweets actively.  And I want to share a few of his tweets which really resonated with me.

Dean Thomas is man of the people.

Still learning social media. A student yelled at me tonight, “Dean Thomas, you gotta tweet back to your students.” Will do.

— David Thomas (@ProfThomas) April 18, 2012

The next will resonate with many of us in this room who are investing – time, energy, mentorship and capital – to transforming not only Georgetown but also Chicago.

Movie review: Hunger Games. Nine thumbs down. Save your money and time.

— David Thomas (@ProfThomas) April 8, 2012

And we also learned about the Dean’s interests.

He disliked the Hunger Games movie, tweeting about giving it 9 thumbs down. And he is a big fan of Jeremy Lin, tweeting about Linsanity and being Linsane a number of times.

To transform the world, we at @msbgu must continually transform ourselves. We must “be the change.”

— David Thomas (@ProfThomas) March 30, 2012

  Headed off to the Boston Garden to see Celtics v Knicks and Linsanity!

— David Thomas (@ProfThomas) March 4, 2012

  Dr. Thomas, I assume you’ll be supporting Derrick Rose and the Chicago Bulls while you are here this week.

So, as a Georgetown alum, a Chicago resident, and our Dean’s 1,089th follower on Twitter, I’m honored to introduce Dr. David A Thomas, the Dean of Georgetown’s McDonough School of Business.”

-April 2012

Late last year, I participated in Potluck 2.0 and quickly realized that I was unaware of an incredible underground Chicago scene.  Potluck is a speaker series (see: Ignite) where people from very diverse backgrounds speak undisturbed for 6 minutes.  After presenting about taking the leap into entrepreneurship, I listened to a group of amazing and eclectic poets, actors, writers, and comedians tell creative and unfiltered stories.  I was blown away.  And they referred to a Chicago scene that I had honestly had never heard of: live magazines, books & beer, design based speaker series, and much more.

When friends in other cities ask me about Chicago, I evangelize the beach, our college football Saturdays, how nice people are, and of course, our summers – none of which is novel.  When asked about trying new things like Yoga or Farmers Markets, I say that I can’t touch my toes and can barely cook but that I experiment with Chicago by regularly attending start-up events and trying new restaurants.  Being with such diverse group of people at Potluck made me realize that I had never left my comfort zone. Even when I worked in finance previously, I would volunteer on junior boards composed of other young finance professionals.  My exploring of Chicago was tied to my profession and my palette.

My fellow Potluckers.

So I want to continue expanding my status quo.  Saya, the co-host of Potluck, shared a list of events and activities that are underground to me.  My experiment is to attend one new event each month.  The list is below. Who’s with me?

Fear Experiment (another of Saya’s ventures that helps strangers face their fears of dancing comedy very very publicly) http://www.kickstarter.com/projects/sayahillman/fear-experiment-strangers-facing-fears-in-front-of

Story    http://2ndstory.serendipitytheatre.org Get Mortified    http://www.getmortified.com/ Dollar Store    http://www.dollarstoreshow.com/index.html Write Club    https://www.facebook.com/#!/WRITECLUBRules 2nd Fridays    http://www.chicagoartsdistrict.org Salonathon    https://www.facebook.com/Salonathon Essay Fiesta    http://essayfiesta.com/ Reading Under the Influence http://readingundertheinfluence.com/ Paper Machete    http://thepapermacheteshow.com/ Tuesday Funk    http://www.tuesdayfunk.org/ Drinking and Writing Theater    http://drinkingandwriting.com/ Interview Show Funny Ha Ha    http://www.zulkey.com/funnyhaha.php Story Lab    http://storylabchicago.com/ Ignite    http://www.ignitechi.org/ Pecha Kucha    http://www.pecha-kucha.org/cities/Chicago P. Fanatics    http://www.pissfanatics.net/ This Much is True    http://www.thismuchistruechicago.com/ The Moth    http://themoth.org/events The Encyclopedia Show    http://www.encyclopediashow.com/EncyclopediaShow/Home.html Here’s The Story    http://heresthestory.org/ Story Club    http://www.storyclubchicago.com/ Grown Folk Stories    http://www.facebook.com/pages/Grown-Folks-Stories/120392737992152#!/pages/Grown-Folks-Stories/120392737992152?sk=wall Windy City Story Slam    https://windycitystoryslams.wordpress.com/about/ Real Talk Live    http://www.facebook.com/pages/Real-Talk-Live/135852693139029

Next week is the fourth edition of Tech In Motion** (TIM), an event at which a startup “pitches” its product, and panelists and the audience analyze the business.*  In November, I participated in TIM III as a panelist along with Troy Henikoff, CEO of Excelerate Labs, Bob Sell, a Partner for Seyfarth Shaw, and Matt Cobb, VP of Product of the Chicago startup Valkre to hear from the presenting startup, Spontaneous.

During the Q&A session, we broke down what I consider the key elements of any startup business model: (1) identify the problem; (2) learn from customers and/or partners; (3) develop a corresponding solution; (4) prioritize which network to target; (5) revenue model; and (6) implement customer acquisition strategies.  The last point is often a black box for startups.  Dashfire brainstorms with a number of startups, and before we discuss technical feasibility, we always touch on customer acquisition and ask, “how will you acquire your first 10,000 users?”

If you build it...

The most common response is “we will build an awesome site that will attract new users.”  Unfortunately, this is not the field of dreams. Just building something does not guarantee that people will come.   Our attention is divided between 500K iPhone apps, 300K Android apps, and a gazillion web applications.  Attention is a currency and startups need to focus on building up their reserves.  Having a defined customer acquisition strategy is integral for a startups; the dreaded scenario is launching a site to no audience.

A business that targets end users (B2C) is often the most challenging.  Where do you find your users? How do you convince them to not only try your application but to return? Going viral? That’s not something you can just will. It takes a perfect combination of position, product, and luck.  Facebook? Twitter? Both are options, but the user bases are so vast making it difficult to target the key demographic.  Search? The associated individual user acquisition costs with  Facebook or Google can be a gamble and expensive.

Instead, go to where your customers currently reside.  Make channel partnerships.  Find a business, a group, or a targeted network and gain access to their users. It may be a longer sale cycle, but once executed, you can grow from 0 – 10,000 more quickly and cost effectively than acquiring users one at a time.

*Our very own JC Garrett will be a panelist at TIM IV.

**Video highlights from TIM III:  http://vimeo.com/32249128

Here’s an idea for a new venture as described in less than 250 words…

Fourth grade math in 1992.  I remember my teacher introducing a new topic, writing a question on the board, explaining the answer, and then handing every student the same worksheet of practice questions.  A linear curriculum for a classroom of students who differ in not only the way they learn, but in their strengths and weaknesses.  With the available resources, this made sense for 1992, but not 2012.

Addressing this archaic methodology makes education technology so exciting.  At Dashfire, we have worked with companies that help high-school teachers, alumni organizations, and teacher training.  Meanwhile, companies like Khan’s Academy (which should be used by adults too) are monumentally progressing the way children learn.  I look forward to seeing how tablets influence children’s education.  Although not initially designed for them, children have mastered the iPad, whether by sliding to unlock or playing Angry Birds.  I envision students conducting their coursework on a tablet (or to a lesser extent, computers) with intuitive programming.  The software would use how the student responds to a question – correctly, incorrectly, methodology – as a diagnostic to generate the subsequent question.  Students will learn at a pace that is appropriate for them while teachers can identify (from a tablet of course) which students need extra, real-time attention.   This would finally sideline reactive education – waiting for students to fail before addressing their needs.  I imagine that there are leading engineers and/or decision science PHDs building this technology.  And if there aren’t, let’s get started!

I am headed to the American India Foundation (www.aif.org) Chicago fundraiser tonight.  On the surface, it is an elegant Bollywood-themed gala that will host over 600 corporate and philanthropic leaders from Chicago.  Behind the scenes, the annual event is a primary source of capital that funds AIF’s mission to catalyze social and economic change in India.  AIF packs a strong punch for a lean organization that relies on hundreds of ambassadors, volunteers, and supporters.  It has partnered with 115 NGOs that has impacted the lives of 1.5 million underprivileged Indians by partnering with and funding vetted Indian NGOs.  I appreciate this model because rather than blindly donating to a cause or a country, AIF supports local organizations that can execute, not just ideate.  It is also the organization that granted me and 22 of my peers the Clinton Fellowship in 2008 to work directly with the NGOs it funds.  I’ve posted candidly about my fellowship experiences working in Gujarati slums with the incredible NGO, Saath (www.saath.org) here.  But in short, my 10 months in India were a perspective-changing experience.  I learned that through innovation, creativity, understanding, and entrepreneurship, anything is possible; but I also learned that social change requires patience and diligence and takes years or generations, not months.

Tonight’s event will likely raise thousands of dollars which will continue to expand AIF’s reach and impact.  But what excites me most about AIF and the general social development landscape is the new market-based approaches.  Donor-based investment is critical to charitable organizations, but it is susceptible to recessions, and therefore, not entirely sustainable.  Many of AIF’s programs, including the ones employed by Saath, utilize the model illustrated below.  One investment recycled for continual empowerment.

I presented at Ignite Chicago late this summer. Ignite is a speaker series (see: local TED Talks) where presenters discuss a topic of their choice for five minutes but have only have 15 seconds per slide before it auto advances. Not easy.  The topics ranged from why dogs should wear seat belts to bob dylan’s art collection, and in the past have discussed “why you hate comic sans” and ” boobs & boys.”  My favorite presentations from this night were @BoopBoopBDoop: Annie – in her a mile a minute delivery – had the crowd in fits; and @jersmith22: Jeremy spoke about how his love affair with parking tickets fueled his start-up idea.

I spoke about how non-engineers can and should lead internet start-ups.  Like I’ve done during previous presentations, I polled the crowd to see who had a start-up idea and roughly half the room raised their hands. But when I asked how many engineers were present, only 4 hands went up. It’s becoming more apparent that people want to launch the next. big. idea., but don’t know how to get started. I spent my 5 minutes explaining how to do just that. I was asked to publish my slides, so I’ve linked them below with text descriptions.

[youtube]http://www.youtube.com/watch?v=Z7_I79990dw&feature=player_embedded[/youtube]

Here’s the actual video, however, the sound quality is poor.

[youtube]http://www.youtube.com/watch?v=8d7pcJf6ciw&feature=player_embedded[/youtube]

Thanks to @startupstella and @timjahn for bringing Ignite to Chicago. Can’t wait for the next series!

Here’s an idea for a new venture as described in less than 250 words…

Let’s start recognizing individuals who influence us in a tangible manner. Over the past year, I’ve actively created a social brand beyond Facebook and have connected with a variety of individuals – many of whom I’ve never met.  But while I’m finally developing a rapport with my Twitter followers and LinkedIn connections (at least according to Klout – a social influence ranking site), my social profile doesn’t capture the people who really move the needle for me. You see, most connections on social networks provide me with intangible benefits – general knowledge and information shared through insights and, of course, links.

Intangible certainly doesn’t mean inconsequential.  When Brad Feld shares an article, I read it.  And when Shaq tweets about a new company (see: Tout), people check it out.  But are these actions tangible to my day-to-day life?  I’d like to factor and weigh depth of influence more heavily than the number of followers, retweets, and mentions.  My influencers – those who make introductions to key individuals or companies, provide thoughtful feedback, or help advance my status quo – should receive infinite points for how they have moved the needle for me (see: PBOD).  Similarly, my offline influence of advising companies, networking, career guidance, etc. are more valuable than my tweets.  Are current metrics actually just smoke and mirrors?  I’m not discounting the power of the network, as I rely on Linkedin for introductions and Twitter for awareness.  But to appropriately measure clout, we should  document  tangible impact from our network.