Rowland Frazee

Transcription

I've had the wonderful opportunity to interact with so many of you, today and during the last week, through a survey that I sent out where I asked you what is the biggest problem in the world. And I can tell you from your answers that this room, full of people, is full of compassion and wonderful thoughtful group. Actually, which has given quite a bit of thought to this question already. And I was also excited to see that many many of you agreed with my top 5 list of what the biggest problem in the world is today. Starting with clean water, which we heard about today, poverty, chronic disease, sustainable energy. But I was a little bit surprised that nobody in this room agreed with my number 5 top problem in the world which is: "How to get potato chips to everybody across the globe who wants them." Now, stay with me. Last year the World Heath Organization spent 5 billion dollars across the planet delivering health solutions. But also last year a very important organization, known as the Institute for Spreading Potato Chips to Every Person, otherwise known as ISPEP, spent 50 billion dollars delivering potato chips. Now if we spend 10 times as much money delivering potato chips, it must be 10 times as big a problem, right? Well, obviously I am being sarcastic about that but it brings a really important point which is, corporations are incredibly powerful at delivering solutions to problems. But they make absolutely no value judgment about which problems they're going to solve. So today I am gonna show you how one small twist can take the power of those corporations and drive that energy into solving world problems. It's called "Good Returns" and we'll learn exactly how it works today. To really understand this I want to give you a practical example of how a world problem can be addressed. I work with 3 micro-finance institutions and they have this wonderful program, I call it "anti-poverty package," where they deliver to women in rural areas a group of training and services, so they get healthcare and healthcare education. They get different kinds of job training or trade training where they can learn how to earn a living for themselves. And then they also get a small loan. Typically it's about a 150 dollars. And the amazing things is, within 6 months these women will start a small business, they will repay the entire $150 loan, with interest. And all of the money that it takes to provide these social services comes from the interest on those loans, which means this organization is totally self-sustaining. It doesn't require any donations once it gets going. This is called a social enterprise. It addresses an important social problem but it does it in a sustainable way. Now, let's compare that to what a company looks like. Most of you are familiar with this model. You have an investor, they put their money into a corporation, the corporation makes a product or service, they make a profit, and ultimately those profits are distributed back to the investor. And this might seem obvious but it's important. That's the reason the investor puts their money into the business in the first place, it's because they're going to get more back out. In fact, a company is a profit-making machine. That's what it is designed for. And it has an interesting side effect. Because it can promise a large profit to investors, it can pull in massive amounts of capital. And that lets our potato chip making company build a plant half-way across the planet. They can raise that money with the promise that they are going to return more. You heard earlier today about the non-profit model and the issues with that. Money is put in by a donor and all the money is spent. So where a corporation might be a profit-making machine, a non-profit is a society-improving machine: it's addressing the right problems but it's totally unsustainable. The social enterprise as we just saw is a great blend between the two because it is a society-improving machine but it uses a sustainable model. So we might think that social enterprises then are the solution to all our world's problems but there is one remaining issue. Because the social enterprise is addressing a low-profit industry. If solving a global problem were highly profitable, I guarantee you a company would already be doing it. So therefore the social enterprise is guaranteed to be working on a low profit problem. And that means it can't make that promise to investors that says, "If you give me your money I'll give you more money back in return." So that's why you see corporations scaling across the globe but you don't necessarily see institutions addressing poverty or water or any of these other great problems scaling very quickly. So now let's build up the "Good Returns" model that's designed to solve this problem. We start with an investor just like before, they put their dollars into a corporation, the corporation makes a profit. But now, instead of returning the profits to the investor under the "Good Returns" model those profits are delivered to a social enterprise that's working on a real important problem. Just for one year. At the end of one year the social enterprise does its good and returns the dollars to the investor. So this process drives capital into social enterprises. Now this is a great theory and there are a lot of great theories about how to save the world. So what I and my friends wanted to do was to prove that it actually works. So we started the very first "Good Returns" company. It's called "Soap Hope." I and my friends put money into "Soap Hope." "Soap Hope" sells awesome products on the internet, it makes a profit, at the end of the year it takes those profits and it delivers them to 3 micro-finance institutions. Those institutions deploy the anti-poverty package, when the women pay their loans back, the micro-finance institution provides the dollars back and then we take our returns. We have to wait one extra year. Now, you might say, "Well that's great Sal, you've got a great heart, and I am glad you are doing that with your one company, but how are you going to drive that to scale to lots of companies?" Well, I am not doing that out of the goodness of my heart. I am doing this because it's great for business. "Soap Hope" has experienced a 100% year over year growth. It has customers that do all the marketing that we need for us. They spread the word like wildfire because they love the fact that when they shop there, they are doing something great for women. What potato chip company do you know that can say the same thing? The great thing about social enterprises is that they address almost every problem that you can imagine. There are social enterprises in clean water, in nutrition, in health care, in child care, in poverty, you name it, there is a social enterprise ready to address it. That means there are business opportunities for anybody who wants to partner with a social enterprise and grab those same competitive advantages. Imagine the opportunity for a giant multinational potato chip company if they offer to their investors the option to check a box that says, "I'll wait one year for my dividend if you insure it and put it into a "Good Returns" style program." Can you imagine the partnerships and marketing power of billions of dollars of shareholder investments going for social good? So now you understand the "Good Returns" model, I want to talk to you also about another question that I asked you on my survey. I asked, "What is the hardest thing you had to do today?" And I got some hilarious answers from this group and I also got some very touching answers from the group. But nobody in the audience said, "The hardest thing I had to do today was to haul dirty water for 5 hours back to my home so my family could drink. Nobody in the crowd said, "The hardest thing I did was to ration a limited amount of food among my hungry children." You know, we are aware of the factors of success in our lives. Most of us know what it takes to be successful. You work hard, you're creative, you're intelligent you knock obstacles down. But we don't think all that often about the vast numbers of success factors that we were either given or just came to us by accident. Nobody in the room taught themselves to read, nobody in the room gave themselves a polio vaccine, nobody in this room had to spend all day long collecting water or food, just to have enough to eat today. I know this woman. I met her last year. She works hard, she is creative, she knocks down obstacles. When we really become truly aware of the vast amount that's been given to us, it becomes almost an urgent need, not to give her anything, but just to provide the opportunity for her to create her own success. I asked you what the biggest problem in the world is. And you told me what it was. You said education, you said climate change, you said water, you said hunger -- Those are YOUR answers. So I came here today to ask you to do something. I know many of you are working on these challenges but I came here to ask you to do more. Spend more of your time, spend more of your resource, more of your creativity, more knocking down obstacles and solve these problems. You know, it's incumbent on us to take that step. So today I hope you'll have a fantastic day of ideas, I hope during this day you will continue to think about what the greatest problem in the world is, but I hope even more that tomorrow morning you'll wake up and you'll take a bold and powerful step of action to solving worlds greatest challenges. Thank you. (Applause)