Tag Archive for: development aid

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Our First Year as Foundation | Review

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A big Thank you to all WIForum Ambassadors, Team members, Advisors, CoWorking Spaces, Volunteers, Community Members, Country Representatives and helping hands We couldn’t be more thankful for every one of you in the big WIF family. Without your knowledge, inputs, generosity, and helping hands, we could not realize the vision of a world where prosperity is possible in all nations, through innovation and entrepreneurship – created within each country.

About doing good

Happy Birthday, World Innovations Forum! February 28, 2019 the foundation was registered with the vision to help nations become prosper through their own way of unfolding the power of innovation and entrepreneurship.

NOTE: everything that follows is through the lens of “economic development”. We are not talking about support organizations in disaster areas, humanitarian aid for health care, victims of war and so forth. Because the purpose of our organization is eradicating poverty, hunger and inequality by creating prosperity through innovation and entrepreneurship, similar to how developed nations evolved.

During our learning curve, we noticed that about US$4.7 trillion has been invested in the past 50 years in economic development. We also learned that the majority of people have not been very excited about the results. Initially, we looked at what other NGOs are doing and tried to blend in. That was a bad idea. Then we tried to find a balance between our entrepreneurial for-profit business with processes and mechanisms from non-profit organizations. It was no better. We read annual reports from similar organizations and realized that many just try very hard to be a good NGO. And a good “active” NGO is an organization that does exactly what a “giver” organization is looking for. Those giver organizations actually decide what active NGOs have to do in order to get funds. Well formulated goals, packed with keywords like “inclusion”, “climate”, “sustainability”, “equality”, “impact”, “social”, “approach”, “reporting”, “jobs created within 12 months”, “project run time 24 month” and so forth. We quickly recognized that instead of looking for funding for our unique concepts, we need to be a service organization for those who provide projects based on their research and desires of their donors. It’s a highly organized, massively structured multi-billion dollar operation. Active NGOs are super busy filing proposals for project requests, making sure they have the resources and a track record that indicates that the respective organization fulfilled the expectation of the giver organization in the past. To simplify the model, it’s a 4 tier monetary distribution structure: Donor – Distributor – Implementer – Beneficiary. This made NGOs more transparent, more efficient, more operational savvy, more trustworthy than ever before. And all have one common objective: HELPING those who are in need. This looks like a great model with little to no waste of money and the donations are really impact-focused. The first big question we had to answer: Are we willing to become an executing service organization for other NGOs. It was not exactly what we had in mind when we started. But we know, there is more to learn.

The receiver side

From day one till now, we decided to work on the ground. So when we visited countries and worked with young entrepreneurs or those who want to become one, we feel the heartbeat and learn how we can support them best. Amazingly, we experienced a warm welcome from entrepreneurs. We realized they rarely an opportunity to speak with experienced entrepreneurs from other countries. When we talked to local co-working spaces, accelerators and investors, we experienced a much more critical position. “What is your plan, what is your approach, what do you want to do?” our answer was always the same: “We have no plan, there is no approach, we don’t know what we will do. You will tell us how we can be helpful and we see what we can do”. We experienced an amazing transformation from a polite and professional welcome to a warm and friendly ‘love to hear your story’. Over time we heard lots of stories about support organization. To sum it up and make a narrative: “They come here, have a clear plan, based on what their sponsors tell them to do, execute “their plan”, make a lot of stirrup, then come with a team of professional photographers and camera men where everybody smiles, write reports and go back home to hunt for the next round of funding. We appreciate the help but often times it’s just too much work for us with no progress at all”. So why do you do that? we asked. Answer: We are not in a position to say no. Again, our own position was up for discussion: Are we in a position to say no and follow our own entrepreneurial instincts? So far we met and spoke with roughly 1,000 entrepreneurs and startups from a variety of countries including Nepal, Vietnam, Cambodia, Taiwan, Singapore, South Korea, Japan, Nigeria, Ghana, Uganda, Kenya, South Africa, Peru, and a few others. We met with about 50 investors and investor networks, more than 50 co-working spaces, universities other enablers and with several leading politicians in various capacities. We ran two accelerator programs and a series of entrepreneurs workshops. The feedback was inspiring and moving.

The big drivers, and why innovation is zero

Who drives the Trillion $ aid industry?
Governments need to balance out between public interest (tax payer money), national interest, and economic interest. So the donations are split into goals and objectives to balance the various interests, invested in countries that have a positive impact also back to the donating country. What they don’t DO is give money to those who work on the helper front. Nothing wrong with it, I believe, but good to know.
Individual Donors from average worker to ultra-wealthy billionaires. They usually can’t do anything themselves but feel the responsibility and donate from $1 to $1 billion and everything in between to help others. The most amazing aspects are 1) the gigantic amount of money that is aggregated so that we are close to actually really help everybody on earth and 2) how humans demonstrate an ability to organize themselves, their capital on a global scale almost seamlessly.
Corporate Donors from the developed world who either simply want to do good, or want to expand their business, access markets, identify new opportunities or any combination thereof. They either invest themselves or invest through those larger giver NGOs with clear goals.
Massive Giver NGOs with multi-billion $ portfolios who are extremely powerful, yet need to balance the interest of their donors, the political and geopolitical landscape, the overall trends like equality, climate etc., and make sure that the feedback from the “market” (the receiver or beneficiary) is positive and that the overhead to use the donations most effectively is tiny. They have come along way from: “most of the money is evaporating – like in the 1950’s “, to: “most of the money is actually invested in the causes and hit the space it is designated for – like today in the 2000’s”.
Operating Non-Profit Organizations with crystal clear designed requests from giver organization: what to do, where to do, how to do, how much budget is involved and the date they have to complete the task, It’s typically a 1, 2 or 4-year program.
Local Organizations, in the countries with the order to execute the plan they get from the Operating NGOs, funded by the big giver NGOs, with the donations from the individual or corporate sponsors. They have practically no flexibility and simply execute for the money they receive, in the way to program is structured. The sense for what’s needed on the ground is deteriorating and so is the true impact. The price for efficiency is in the end extremely high – non-profit or for-profit pay with the inability to innovate.

Disconnect

The disconnect between donations and real help is growing. Over the holidays 2019/2020 we felt that we either find a radically different model or freeze the operation until somebody else is coming up with a better idea. Since no model was in sight and we experienced the deep frustration from other organizations, we decided to use our own innovation design techniques to explore alternative ways. As a first step, we disconnected ourselves from the conventional NGO space in favor of the actual beneficiaries we live for. The goal is to overcome the problematic “disconnect” from the group of people we want to help and find a modus operandi to finance the organization in a different way. With that we did a few things that should help us think on different levels:
1) We removed the term NGO from our entire communication.
2) We made sure that – no matter what we do – we do not lose sight of our original vision.
3) We started to use our own model of innovative thinking to develop services and business models that make sense.
4) We crafted a whole new business model and will share details once it is more mature.
5) We accepted the risk, that by disrupting ourselves, we will lose most funding opportunities.
6) We decided to build partnerships with those who believe in the concept of a collective intellect, where 1+1 is more than 2.
We will publicly share our experience here on our blog for anybody who is interested in alternative business models and operations for their economic development focused non-profit organization.
7) In no way, we are disrespecting those on whose shoulders we are about to step. The evolution from random donation into random help organizations towards a more controlled and operation was of utmost importance for aggregating the capital to help with large scale projects. Yet the economy of scale as an optimum, not a maximum.

The New Model

  1. We focus everything we do on the target audience, the beneficiary, in our case the entrepreneurs. We also work intensely in collaboration with an enabler, people from co-working spaces, investors, mentors, universities who support the entrepreneurship development.
  2. We work with partners who buy into our vision, strategy, modus operandi, and business model. We are not available as a service resource for other organizations like we would not be a white-label manufacturer if we would be an enterprise.
  3. The business model we created is value-based like in any economic model. We feel that impact measurement will never be seriously acceptable to measure the value one provided. We expect each service having a value that can be charged that even the poorest can pay for. And if the beneficiary is only interested in our work if it is for free, we know there is no value and that would also indicate no impact. For instance in countries where people live off of $1 a day and need all their $30 to survive, we may still ask for 3 cent for our work, also in part to provide economic thinking. Since that would not cover our cost, we are still depending on donations and sponsorship. But those are not to help provide free work but to match and add to value for the beneficiaries.
  4. There are other activities like awareness creation and not directly monetizable activities. For these we look for sponsors like in any industry situation. If nobody is interested in supporting the awareness creation we may still receive donations, otherwise, our awareness campaign will just be very rudimentary. And that is OK.

There are more elements we are working on but for now, that is our alternative model for innovative non-profit organizations.

Next Steps

1) We believe in innovation on all levels – also for organization models.
2) Connecting with a like-minded organization to think together is part of our next steps.
3) After learning, entrepreneurship is the mother of all prosperity, we will continue with that very model.
4) Our focus is exclusively on our work on the ground in the countries and support from those who think alike.
5) We will look or partnerships in the spirit of SDG 17 as we believe there is no NGO big enough to solve the world’s problems alone
6) Innovation in the NGO space is not only an organizational necessity but paramount to actually fulfill our goals.

 

 

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Who is in the top 1% of wealthiest people?

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Quite a lot of the readers of this blog actually are one of the top 1% wealthiest people in the world. But because the majority of our readers lives in developing or emerging countries, they are not. There have been countless discussions why or why not, what we can do to stop the rapid widening of the gap between rich and poor. But what can we actually do? How can somebody help while in their own career stress?

Source: Washington Post chart

Enjoy your wealth – seriously do. Just also recognize your share of responsibility.

Since 2017 we are working on that question. Since 1960,  $4.7 Trillion have been donated to development aid with little result. The number of annual donations is growing rapidly to approx $ 1 Trillion per year now. An income of $32,400 per year would allow someone to be among the top 1% of income earners in the world. Multi billionaires today are what was a multi millionaire in the last century.

As part of our work, we met with many members of emerging – or developing countries and realized some shocking situations. We selected the top three reasons and some conclusions together. In late 2018 we completely reworked our approach of helping entrepreneurs. And we realized a path in development aid that has never been touched before.

Identifying the root cause(s)

We were working hard to identifying root causes. We realized, it didn’t happen just randomly. It happened because of many individual reasons. And there are three reasons with the biggest negative impact as far as I can see.

1) GROWING DONATIONS

Mankind donated enormous sums of money to help the poor. Over time as some got richer, they donated more and more. More NGOs have been created to help distribute the aid. All in the very best intentions. Only rarely money goes elsewhere. On the surface it looks good. But when looking under the hood, it looks very different – even dramatic. The money donated did not make a difference. Nobody really know where to start, whom to give it to and so it was given t the poorest. They consumed it, survived, but did not change the economy. A dramatic development happened. As long as donations were flowing into the country, the people got smarter about what to do to get donations and even more donations. Not because they are greedy and lazy – simply because that has become part of their “economy”. The system that we (the developed countries) instituted was simply wrong. Instead of helping the strongest to build an economy we helped the weakest and built nothing. I feel this is the hardest part to admit – but we have to. I spent time with people in Vietnam, Nepal, South Korea, Peru, Germany, Switzerland, Albania…. In the end I came to the conclusion: We have to slowly but steadily stop random donations and make impact specific donations to help build economies if they are actually wanted.

2) ZERO EDUCATION ON WEALTH DEVELOPMENT

Children have on average 20,000 hours of school. This is true for developed countries as well as many emerging countries including Ghana, Nigeria, or Peru. They learn reading, writing, calculating, and learn about history, geography, physics, biology and so forth.
However – not a single hour is given on how to acquire wealth. Creating wealth can now be easily found on the Internet. It’s used by some and the number of rich people is growing rather quickly. In accordance to Investopedia, 75% of the wealthiest people created their wealth as entrepreneur. Every nation is hungry for innovative entrepreneurs. Not because when rich they pay a lot of taxes but their business will fill the tax pockets. In contrast, those who do not know, coming from a background where getting rich is still equal to be “bad and greedy” are obviously falling behind.  My conclusion: Offering just one hour to explain that the rich “invest” their money, while the poor “spend” it. Giving some basic information and how to search it on the web would make a huge difference.

3) DEPLETION (Materials & Talents)

The developed world and now the top emerging countries are big in exploiting natural resources from foreign countries for peanuts. But the biggest problem – by order of magnitude – is to get the top talents of the poorest countries out and invite them to more attractive nations. With that we not only steal some top brains but the very foundation of a nation to create their own economy. The top nations in the world had only a very few super smart brains like Alfred Escher, Robert Schindler or  Henry Nestle in Switzerland — Carl Benz, Robert Bosch or  Werner v. Siemens in Germany — Lee Byung-Chul, Koo In-Hwoi or Chung Ju-Yung in South Korea — or William Shockley, Gordon Moor and Steven Jobs in Silicon Valley. Today it’s easy because most politicians – even in the developed world – simply don’t understand the impact.

DEVELOPMENT FROM WITHIN

With all that said, I personally and wholeheartedly trust that we need to broadly start inspiring and supporting the strongest entrepreneurs in each nation to stay there and realize their entrepreneurial dream, building successful businesses and export their ware as soon as possible. Their genuine creativity, coupled with their few of the local problems and the problems of other developing countries will bring solutions that can turn any of the nation into a developed country – and it won’t take much longer than 20 years. Yes, this goes against all the artificially created ideologies of inclusion and helping all the the ideas of equality and so forth. But the past 70 years has proven that this model did not work – despite 4,700,000,000,000 (4.7Trillion)  Dollars investment. At the same time the best of the best get nurtured and funded in Silicon Valley who then continue the rich/poor widening process. If we continue diluting the capital of the rich to just provide charity for the poor, instead of taking at least some money to build out economies that help them develop prosperity from within their society and provide education how ALL members of any given society can participate in that wealth – we will never have enough money to donate.

There are certainly more problems that cause the rich/poor gap. One of the biggest reasons is often pointing to corruption. The more we have been analysing that issue, the more we came to realization it is simply just another loud cry for helplessness, based on poverty and hunger to survive. I’m not defending corrupters but we can do better than pointing at them to find a somebody we can blame (Prosperity Paradox by Clayton Christensen (Harvard), is a good read). And then there are hundreds of tiny issues. But all those issues have been very present in the 1800’s Germany or Switzerland, in the 1950’s farmland of Northern California and even more so in one of the poorest Asian countries: South Korea in the 1960’s.

Consequence

Of course we do not expect that the world is following our concept. For us, the consequence is to build strong and innovative entrepreneurship from within the countries. This is a long and painful path as any startup in the west or in the east, north or south, is taking approximately 10 years to grow from zero to an economy relevant size. But we feel it’s better to start now than hoping for a majical shortcut to become “rich in 30 days”. NGO projects usually go 1 – 4 years. Far too short to actually get anything notable done. And so we are looking for philanthropists, donors and other giving organization that go this long path with us. If you like to help as a volunteer, donor, international investor (investing in promising startups) or in any other capacity – your support is deeply appreciated.

 

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Completely rethinking
economic development aid

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DEVELOPMENT AID OF THE LAST 70 YEARS

Trying to help 3.5 Billion people in 75 of the poorest countries getting out of poverty seems to be a daunting task. In the past 75 years it failed, despite staggering 4.7 Trillion Dollar donations. Even if we try to be fast and complete the job in the next 10 years, we have another, major challenge: With 130 Million new babies born each year, we would need to nurture and educate 1.3 Billion newly evolving people in 10 years from now. Our job would never be completed.

HELPING FROM WITHIN

Ctrl-Alt-Del – Completely rethinking development aid. Why not applying the much admired Silicon Valley thinking here and develop a radically different perspective. Instead of trying to help an astronomic number of people across the globe – why not replicating what already worked so much better in the past: Building an economy from within a society through innovation and entrepreneurship – instead of donations that lead to a society that is perfectly educated to apply for more donations.

A PROVEN CONCEPT OVER CENTURIES

19th century Germany: a small number of entrepreneurs, including Carl Benz, Robert Bosch, Max Plank und one or two handful of others, created startups that should turn the nation into one of the most prosperous in the world. 150 years later, the 85 Million population is running a 4 Trillion$ economy.
In the 1950’s, in Northern California, USA: a small number of startups including Fairchild, Intel, Hewlett Packard, Apple and later on many others created products, that in just two or three decades revolutionized the world’s way we communicate. Silicon Valley became the epicenter of IT innovation. And short thereafter in the late 1990’s in South Korea: only three startups: Samsung, LG and Hyundai were necessary to turn one of the poorest countries on earth into one of the most developed nations just 2 decades later. The most interesting leaning: Innovation and entrepreneurship is geographically independent.

TALENTS ARE ALL OVER

During our travels around the globe we realized one incredibly important fact: a few exceptional talents are in any country – enough to change their whole economy for the better. We have seen exceptional people in Ghana, Nepal, Kenya, Peru, Bosnia, and other countries. We therefor know: unless the respective governments kill their nation through corruption or any major dictatorship – every nation on earth has enough engenius people to turn their country into a prosperous nation. What need to stop however is the stealing of foreign resources. Some hundred years ago was the stealing of natural resources, today it is the stealing of intellectual resources.

THE IDEA

If the poorest countries have some sort of Universities today. Some produce over 50,000+ academics like in Nepal. We (all of us together) should be able to empower the best of the best in each country to stay there, build a business and contribute to their own ecosystem. Within 10 years such a country could become a developed country. All we need is on average 100 top startups – which we can distill out of 1,000 who try. With 75 countries to develop, we are talking about 75,000 entrepreneurs. Now, I’m asking: isn’t it much more reasonable to help 75,000 entrepreneurs to fire up a self propelled economy, then trying to help 3.5 Billion people to survive?

WORLD INNOVATIONS FORUM

This is what the World Innovations Forum is all about. Obviously we can’t do that alone. But we know, we will get enough support, enough supporter, enough mentors and enough instructors to help 75,000 teams to thrive. This is what keeps us up and running every day.

What we exactly do?

1) Immediately helping 5,000 teams to understand what it takes to build a robust company that can go global and accompany the teams on every step of their way. We intent to hire approx 250 people locally to help us do that and look for another 1,000+ volunteers to do just a little but very meaningful support.

2) Building up investor networks and working on ways to make foreign investments much easier. A Swiss startup may look for $300,000 seed rounds. A Vietnamese startup can do the same for $30,000 and one in Nepal for $3,000.

3) Assembling partnerships with local and international organizations to build the ecosystems that truly enable entrepreneurs to build self propelled economies. To do so we reach out to universities, city councils, corporations, incubators, mentors, governments, technology provide and so forth.

Knowing that we will get the support, we already started. We have ambassadors in several countries and want to expand. We collaborate with the local embassies, met already over 1,000 entrepreneurs, presidents from universities and many politicians. Why not just join us.

“Prosperity for every nation”
may become the most promising project of mankind.

 

Axel Schultze

P.S.
Changing the world is what hundreds of thousands of entrepreneurs are doing every day – for their companies and their markets. It’s time to spend a tiny piece of time and maybe money to empower entrepreneurs in nations that are less fortunate with education, capital and support.

Join us

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