Progress Report

Announcing Social Citizens! A Partnership With The Case Foundation Promoting Social Entrepreneurship And Impact

Wed, 01 May 2013 10:56:00 -0400

by Team Collaborative Fund

From its inception, Social Citizens has served to spark discourse around the ideas we hold dear: collaboration, transparency, and social entrepreneurship. It’s a unique community of like-minded individuals, passionate about the things that matter and predisposed towards action. Today, we’re excited to announce that the Case Foundation has transitioned stewardship of Social Citizens to the Collaborative Fund. Moving forward, we’ll be engaging @SocialCitizen 330,000+ followers, and incubating discussion through a new Social Citizens Subreddit.

The original mission centered on creating social impact will remain consistent. However, the next phase of Social Citizens is focused on creating opportunities for discussion and action. The two platforms we’ve chosen as vehicles for these conversations are collaborative in nature and we’re excited to see the direction it takes—-wherever that may lead.

As an endeavor driven by the community, and in the candid spirit of transparency, we think it’s worthwhile to lay out some modest goals for all of us to work towards. A few metrics we hope to achieve in the coming months:

Social Citizens Subreddit:

50+ comments/day from external posters
A visibly active voting pattern that indicates people are engaged
15 decent (non-spammy and relatively high-value) posts a day submitted by external posters (i.e. posters not in the Collaborative Fund network)

@SocialCitizen:

Average of three retweets per tweet
25 collective “favorites” through a given day

*These metrics are a bit of a stab in the dark - but exemplify the overarching goal of this initial phase which is community engagement.

We look forward to hearing from you on Twitter @SocialCitizen, and on the Social Citizens Subreddit. It’s going to be a very interesting exercise investigating the possibilities of collaboration.

The Sharing Economy is coming of age

Thu, 24 Jan 2013 10:39:00 -0500

by Craig Shapiro
Founder/CEO at Collaborative Fund

In San Francisco, you can find the “Airbnb-of-everything.” Just as Airbnb capitalized on the fact that many of us have a spare bed, bedroom, or even apartment from which we’d gladly make some money, many other industries have followed suit. Today, you can earn money by filling the spots in your car on a road trip, being a personal tour guide for out-of-town visitors, lending your car out when you’re not driving it, or doing odd jobs for people in the city.

At Collaborative Fund, the fund I founded to invest in collaborative businesses, we are helping to support a cultural shift away from excess, hyper-consumption, and ownership, and toward access, sharing, and efficiency. We hear about new stories that exemplify this shift all the time, like programmer Avi Flombaum quitting his day job at a startup where he was CTO because his hobby teaching Skillshare classes earned him $100,000 in one year. Few teachers make that much in traditional schools.Or Curtis Chong, who earned $5,300 in a year letting others drive his Honda Civic worth $4,800on RelayRides. These marketplaces enable people with excess supply to find demand, unlocking viable economic activity.

Still, there are key questions facing these budding markets: job creation, regulation, and long-term business growth.

JOBS

Taking a step back from the success of Flombaum and Chong, it’s clear we’re living in a job-anxious landscape with high unemployment and frustrating under-employment. As startups like Skillshare or RelayRides gain traction, peer marketplaces are coming under the microscope. Economists and journalists question whether the technology boom of Silicon Valley actually creates jobs. The Kauffman Foundation reported that the number of new employer-enterprises (business that hire others) has declined since the 2008 recession, despite entrepreneurship rates increasing.

Apple, the most valuable company in the world, only employs 43,000 people, most of whom work in retail stores and earn roughly $25,000 a year. So we have to ask, do gigs—some full-time, some part-time—qualify as sustainable jobs? If I make the majority of my income selling jewelry on eBay or Etsy, or hosting guests in my spare room on Airbnb, is that my job? If not, what is a job?

In a partnership with design firm IDEO, Collaborative Fund attempted to answer this question by imagining ways people might sustain themselves in the future, and identified some of the businesses already reshaping our definition of work. We were prompted by the term the gig economy—a nation of freelancers that now includes one in three working Americans. While many of the new companies facilitating this lifestyle are young, the sector has shown rapid growth, and municipal and federal regulators are taking note.

REGULATION

Regulation of Internet-facilitated sharing has a standing history. Napster demonstrated how peer-to-peer sharing could wreak havoc on institutions, and even entire industries. Craigslist is still a buy-at-your-own-risk platform. And today, ride-sharing services like Uber—where black-car drivers act like on-demand taxis—has come under fire for operating in gray areas of legality. Airbnb has faced regulatory challenges at the municipal level in San Francisco and New York, and the California Public Utilities Commission issued a cease-and-desist warning to Lyft and SideCar, two popular ridesharing services based in San Francisco.

The regulatory instinct is to resist new forms of economic exchange to protect both buyers and sellers from fraud or danger. But beyond the questions of trust and reputation, regulators and investors alike are wondering: Does it slow down construction if we use Airbnb instead of hotels? Does it slow down Detroit manufacturing if we share cars and rides instead of buying new ones? Does increasing productivity from existing resources hinder economic growth?

The oft-cited Jevons paradox proposes that using a resource with more efficiency actually increases, rather than decreases, the use of that resource. But it’s not obvious that efficiency and growth are complements. So, should the laws of small business taxation apply to someone who is a full-time Skillshare teacher, like Avi Flombaum? Some worry that these new businesses will create an informal economy, which lacks the safety nets of social security, health insurance, anti-discrimination, and taxation. These are defining aspects of our social fabric, no matter your politics, and it’s time to rethink how we support them in this new economy.

LONG-TERM GROWTH

You have to be wary of over-exuberance by entrepreneurs and investors, who could latch onto this trend for quick gain instead of creating a true foundation and scalable businesses. Remember the post-The Inconvenient Truth enthusiasm for startups targeting the green and eco-friendly audience? Much like the “Airbnb-of-everything,” today, then we saw the “Eco-of-everything.”Most Lyft drivers or TaskRabbits we’ve encountered are just glad to have income coming from somewhere. And beyond individual gain, these marketplaces boost local economies. Airbnb hosts have contributed $56 million in spending to San Francisco; $43.1 million of that figure supported local businesses around the hosts’ homes. But platforms that facilitate opportunity to create wealth must be built to last. Otherwise their impact is nominal, if not damaging to the ecosystem long-term.

THE FUTURE

Here’s the history lesson: Many of those “green startups”—even those with big venture backing—failed because they lacked authentic core values, patience from their investors, and, most importantly, a solid foundation built on real business logic.

The road ahead for collaborative businesses will be filled with many obstacles. Governments will struggle to keep pace with innovation. New businesses without a sound economic plan will fail. In the near-term, our economy will continue to be based largely on consuming new products and services en masse.

However, I’m optimistic. Collaborative businesses are now working their way out of the hype phase and getting tested and refined in ways that will determine their long-term role in the economy. Entrepreneurs and consumers are finding efficiencies and adapting to the reality of a world with fewer resources and latent potential. As jobs evolve away from traditional corporate models and regulatory challenges get worked out, collaborative businesses are poised to generate the greatest financial return on investment over the next decade and beyond.

From editor to investor

Thu, 24 Jan 2013 08:33:00 -0500

by Karyn Campbell
Investor at Collaborative Fund

I tend to avoid telling people I'm an "investor" or a "writer/editor." The truth is, I don't know, and suspect a lot of other people don't know what to call themselves. All the assumptions that come with your professional title can be paralyzing to actually doing. Oftentimes people ask me how my background relates to what I do now. To give a little context, I started out as a writer and editor for my college daily newspaper, and later became a magazine writer and wrote copy for ad agencies. Then I worked for a design startup before coming to Collaborative Fund.

In some ways, great editors do something similar to what (hopefully) great VCs do— they validate narratives, and help them come to life. An editor maintains the voice of a publication (or a brand), and drives its direction. An investor sticks to a thesis, and, if she's smart, becomes an expert in her market. An editor is a gatekeeper, though this has been largely democratized by the internet. I expect what happened with the rise of User Generated Content will happen to the rise of crowdfunding: There will be a lot more companies, but the most watched will still receive traditional VC support in addition to love from the crowd.

Deciding what will scale is very similar to understanding what goes viral. In many cases, a story or creative pitch is like a company pitch — gatekeepers are human, and want to hear stories. The best writers have editors begging them to publish. The smartest entrepreneurs have VCs knocking. Good writing and good design give life to the most genius idea or technical breakthrough. And they're worth very little unless they tell us something useful or beautiful.

Instinct is very important in early stage investing. It's my hunch that Instinct's sister is Taste — a role traditionally left to the literati and artists. But neither instinct or taste have any value without experience and knowledge. If anything, the time is now to rethink who or what an investor is. She is anyone, now that crowdfunding sites allow most anyone to make returns on a company they back. And it's time to redfine what a "writer" can do. To quote a piece by software developer and author Rands, "We, as social creatures, often better perform rituals to form understanding one on one, but good writing enables us to understand each other at scale."

Post image by Danny Chung

Create a community before launching

Wed, 05 Sep 2012 14:00:00 -0400

4 reasons to create a community in your industry before launching your startup:

You will get to know your customers and what they want.
You will make connections that can give you input, feedback and help you get to where you want to go faster.
You will be building a reputation for yourself.
You will have created a ground swell of support that you can leverage when you launch.

from Ready Set Startup’s Startup Tip #50

Backing the Shared Future

Tue, 19 Jan 2010 13:24:00 -0500

Here we are!

Collaborative is officially open for business.

We are an investment fund focused on supporting and investing in the shared future. The fund centers around two macro themes which I think will be driving business innovation in the coming years: the growth of the creative class and the concept of collaborative consumption.

Specifically, we will focus on the increasing importance of creativity and values (like happiness or transparency) and how that relates to which businesses consumers choose to buy from; as well as the shift from an ownership based economy to an access or sharing based economy.

These two forces present a significant opportunity for new technologies, products, and services to transform how we do business and the way we live our lives.

Below are some thoughts, ideas, people and experiences which have helped shape Collaborative’s investment strategy.

First - Values matter. The world is changing.

It is harder to get into Teach for America than it is most top law schools

Zipcar just filed to go public with a fleet of more than 8,000 vehicles

AT&T prominently featured TOMS Shoes and the power of giving in national advertising

Netflix is crowd-sourcing one of their most strategic assets

Zappos is trying to hire people who are a little weird

Something is happening. And as President of GOOD I was able to see first hand what I believe is a future consumption trend. Consumers are increasingly making decisions based on culture and values. And businesses that recognize this trend are winning.

This is not about being altruistic or philanthropic. This is about living a better life. Wearing TOMS Shoes is as much a statement of “status” as it is comfort, price or philanthropy. The things you wear, the places you go, the email address you use, and what you drive are all reflections of your values.

Second - Creativity is paramount. Richard Florida is onto something. The creative class will be the leading force of growth in the economy for the next decade. Their influence and stamp of approval has and will continue to be one of the leading factors of success for many products and or services.

In Cities and the Creative Class, Florida devotes several chapters to discussion of the three ‘T’s”: Talent (a highly talented/educated/skilled population), Tolerance (a diverse community, which has a ‘live and let live’ ethos), and Technology (the technological infrastructure necessary to fuel an entrepreneurial culture).

Understanding the behavior and likes (and dislikes) of the demographic driving this trend will be critical to figuring out which products and services will be successful in the future economy. Arguably it is this group that has led to the rapid ascension of such products and services such as: the iPhone, Twitter, YouTube, Honest Tea, Etsy and Instagram, to name a few.

In conclusion, there are some incredible people and organizations already investing in these trends, including:Scott Heiferman, Mitch Kapor, Tim O’Reilly, Steve Case, Ashoka, and Echoing Green, among others. Collaborative is excited to be a part of this ecosystem and add value.

-Craig