Tag Archives: entrepreneurship

The Real Reason Why White Spaces Spectrum Matters

monopoly_just_boardwalkYou may have seen a resurgence of news about “Net Neutrality” in the last few weeks.  This is because a US court recently ruled that the communications regulator (the Federal Communications Commission- FCC) doesn’t have the power to insist that Internet Service Providers (ISPs) operate according to anti-discrimination and anti-blocking rules that it set down in its Open Internet Order in 2010.  While this is not good news for advocates of Net Neutrality, it happened largely because of a strategic administrative error on the part of the FCC in terms of now to classify ISPs.  It is likely that the FCC will attempt to correct this error of classification in the near future.

In the flurry of news and blogging that followed this decision, one of the most interesting articles I read was by venture capitalist Fred Wilson of Union Square Ventures.  He wrote a post imagining VC Pitches In A Year Or Two with a non-neutral Internet.  In that future, anyone who tried to compete with the likes of Spotify, Youtube, Facebook, etc were doomed because they couldn’t afford to subsidize access to their Internet services in the way that the incumbents could.  It pictured a world where the small player just couldn’t get a foot in the door.

It’s a great post and worth the read.  I wanted to cry though when I read it because that possible digital future is our current wireless reality.  As a digital startup, I can spin up a server on a host of cloud platforms at extremely low cost and scale them as I need them.  The same infrastructure that drives giants like Netflix, drives little startups.  This is a world of infinite potential where you ability to create is limited only by your drive and imagination.  Not so in the wireless world where Fred’s dystopian future is already a reality.  Do you have a vision of competing with the likes of Vodafone, MTN, or Airtel to provide affordable access?  Good luck.  In the wireless world, everything comes down to access to wireless spectrum.  And around the world the political and administrative systems for making spectrum available to anyone except an existing wealthy elite are broken.

Today spectrum is a highly valued resource and the most legitimate way that economists and policy-makers can think of disposing of it is through spectrum auctions which now generate billions of dollars in revenue.  The Indian 2G spectrum auction finished today generating nearly ten billion US dollars in revenue for the Indian government.  So in order to become a player in the wireless world, you need millions if not billions of dollars.  It is like playing a game of Monopoly where only the two or three most lucrative spots on the board exist.  Not only is the game no fun any more, it’s not even a game.  It is virtually impossible for a small player to break into the market.  Even in cases where the regulator has created incentives within spectrum auctions to encourage new players, they rarely succeed.

In their book, Why Nations Fail, Daron Acemoglu and James Robinson argue the importance of upward mobility.  They illustrate case after case where open markets that nuture and encourage new players and allow them to grow thrive whereas those that allow an elite to sequester advantage and wealth ultimately fail.  They are not alone in this perspective. In Capitalism Redefined, Eric Beinhocker and Nick Hanauer argue that:

Capitalism’s great power in creating prosperity comes from the evolutionary way in which it encourages individuals to explore the almost infinite space of potential solutions to human problems and then scale up and propagate the ideas that work and scale down or discard those that don’t.

This is similar to Stewart Kaufman’s concept of the “adjacent possible” and also resonates with Nassim Nicholas Taleb’s idea of antifragility.  The bottom line is that if you don’t give the little guy a means of participating and growing,  you are both stifling growth and creating a system which does not fail gracefully.

So what to do?  Attempts to weight the wireless spectrum game in favour of the little guy tend to fail.  There is every indication that the game of access to spectrum is broken.  Except of course in the little bit of spectrum known as “unlicensed” spectrum or what is more popularly known as Wi-Fi.  I have written at length on the merits of WiFi and its incredible success but ultimately it is a very small amount of spectrum and limited in that respect.  However, the model of dynamic access to spectrum is a success worth building on and that is where “white spaces” spectrum comes in.  It is an attempt to build on the very successful model that has emerged in the unlicensed spectrum bands and expand them into other frequencies, most notably the UHF television frequencies.

Discussions about white spaces spectrum tend to focus on it being a more efficient use of spectrum or on the fact that UHF spectrum has better propagation characteristics.  Both fo those things are interesting and true but the real power of “white spaces” or dynamic approaches to spectrum regulation is the new entrepreneurial business models that could be built on the back of this approach; models that could re-open the wireless spectrum playing board to everyone.


Monopoly board image courtesy elPadawan

 

Mr. Potato Head

What is a Social Entrepreneur?

This week I’m attending the Skoll World Forum on Social Entrepreneurship.  Thanks to their kind invitation, I’ll be blogging this week about my experiences here.  Having recently left my fellowship at the Shuttleworth Foundation and embraced the world of social entrepreneurship, it seems worth talking a little bit about what exactly a social entrepreneur is.

I have had a few raised eyebrows when I mention the term social entrepreneur.  As I came into the UK, the immigration officer at Heathrow couldn’t decide whether to be less impressed by my entry of social entrepreneur in the “Profession” category or by the fact that my main purpose in entering the U.K. was to “blog”.   By the time he’d finished I was beginning to wonder myself.

Friends and colleagues have also been curious about the term “social entrepreneur” wondering whether it isn’t simply a green-washing of filthy capitalism.

Well, it is true that the term is a bit woolly.  There are lots of people who have been doing great things without calling it social entrepreneurship.  Those people are now being claimed by the social entrepreneurship movement.  Ashoka have a list of early Social Entrepreneurs.  So what is it exactly?

Trusty Wikipedia says that a social entrepreneur “recognizes a social problem and uses entrepreneurial principles to organize, create and manage a venture to achieve social change.”  And what are entrepreneurial principles?  Wikipedia to the rescue again.  An entrepreneur “is a person who has possession of a new enterprise, venture or idea and is accountable for the inherent risks and the outcome.”

So those two issues seem to capture social entrepreneurship a) intentionally setting out to do something good in the world; and, b) putting yourself directly on the hook for the outcomes.  Now those are simple but not completely unproblematic ideas.  With respect to the first, I am reminded of Henry Thoreau who said:

If I knew for a certainty that a man was coming to my house with the conscious design of doing me good, I should run for my life.

Having been involved in international development and philanthropy for some years, I feel a shiver of recognition in the above quotation.  However, what I like about social entrepreneurship is that part b), putting yourself on the hook for the outcomes, is at least partially a cure for the woolly, good-intentions of part a).  An entrepreneur must sustain him/herself and their ability to do so is tested by demand for what they are creating.  At least that is how it is supposed to work.

I’m finding out all about that right now with my own social enterprise, Village Telco, whose success is currently being tested in the crucible of the marketplace.  This approach is not the answer for everything but I know from uncomfortable experience in the world of ICTs and development that a lot of pain and wasted resources might have been avoided by applying market principles earlier on.

So am I a convert?  Do I believe that business is the best answer to solving the most pressing problems?  No.  I think it’s complicated and any attempt to reduce things to simple axioms or models are doomed. But as George Box famously said, “all models are wrong, but some are useful”.  I am really enjoying exploring the useful model of social entrepreneurship in my new work.

OLPC XO-2 goes Open Hardware

I admit to being a little gobstopped by Nicholas Negroponte’s announcment in the Guardian that the next generation OLPC will be Open Hardware is a pretty big deal.  I picked up the announcement this morning from Make Magazine editor, Phil Torrone’s twitter feed in which he says “This is pretty much the biggest news of 2009″.  For the maker, tinkerer, hardware hacker world, this might just be true.

OLPC logo with Hacker symbol overlay

In the article, Negroponte says:

One important thing about the XO-2 is that we’re going to do it as an open source hardware programme. The XO-1 was really designed as if we were Apple. The XO-2 will be designed as if we were Google – we’ll want people to copy it. We’ll make the constituent parts available. We’ll try and get it out there using the exact opposite approach that we did with the XO-1.

CrunchPad at TechcrunchPreviously my chief criticism of the OLPC was their failure to open up their hardware design.  The news that they are going to publish and freely share the hardware design of the constituent parts opens up a host of possibilities.  You may have read recently about TechCrunch’s very cool Open Hardware Crunchpad (pictured at right).  How remarkable would it be if you could start to mash up screens, power supplies, wireless capacity from a variety of sources to make your own low-cost device.  Negroponte is quite specific, he says “everything from the dual display to the touch-sensitive, force-feedback, haptic keyboard will be available.”  So, your mashed up version might look like a laptop or a book (as the XO-2 is intended to) or something completely different.

Hardware is a lot more adaptable than it used to be.  Opening up the hardware components mean that we are not just sitting at the restaurant table waiting for our order, now we can get busy in the kitchen.  Here’s to open hardware kitchens in Africa, in South America, in Asia developing their own tasty  recipes.  Opening up the OLPC hardware design opens up the potential for innovation.

Action Talks, Armchair Pundits Walk

Rosie the RiveterIt is remarkable how polarised the discussion of the OLPC has become.  You either love it or hate it.  I have already said my own say about the value of the OLPC but there is one point that I don’t think has been emphasised enough.

From my perspective, what is insufficiently valued in the discussion about the OLPC is that Negroponte got out there and did something.  He used his time, his passion, his networks, and his most precious commodity of all, his reputation to try to make the right thing happen in developing countries.  He made mistakes along the way but in the end he galvanised the market around low-cost netbooks in a way that I am willing to wager would have taken years longer under other circumstances.  Love it or hate it, the OLPC is a formidable achievement in trying to make information and communication technology work in developing countries.  Sure, I would have done it differently but the point is I DIDN’T DO IT.   I do have my own bet in this space but that is another story.

Why does having a failed start-up on your CV give you street-cred in Silicon Valley?  Because you did something, you pulled your finger out, you nailed your colours to the mast, you tried to manifest something in the world and doubtless learned critical lessons to enable future successes.  My favourite blog post so far of 2009 is by French entrepreneur and blogger Loic Le Meur entitled How You Can Start A Business in 2009, With Passion

It has the following provocative instruction:

- repeat after me “ideas have no value, only execution matters”. When you are done repeat that again.

Hyperbolic it may be but that puts a little extra caffeine in my cup every morning.

Looking for Possible Village Telco Entrepreneurs in Khayalitsha

Visits in KhayalitshaHaving decided to help Dabba explore the replication of their Orange Farm success down here in the Western Cape, it was not immediately clear to me how to go about finding the right place for such a project. Alan Levine of Vanilla (Dabba’s partner in the Cape) initially provided a connection to a local NGO working with schools to provide support services to children affected by HIV to enter formal schooling with the necessary skills. However, after visiting the NGO sites, it was evident that while there was interest in the Village Telco concept, technology and entrepreneurship were not their sweet spot. They could see the value and would make great clients but were not the sort of organisation to drive an idea like this.

So, how does one go about finding a Village Telco entrepreneur? Finding the right partner is an all-to-common problem for philanthropists who know (or are at least convinced that they know) what the right thing to do is but have no idea how to find the right people to invest in. Calls for proposals often don’t work because they prioritize the ability to write a proposal not the ability to get the job done. They also tend to attract the usual suspects. So what do to?

I am embarrassed to say that the answer was simple, so simple it pains me to reveal it. It was this: drive around. In chatting with my colleage Jason, it transpired that a few years ago, he had provided some mentoring support to a startup cyber cafe called Khaynet in Khayalitsha. He suggested we check them out. This potential lead inspired Alan and I to go and do some scouting of Cyber cafes and related businesses in Khayalitsha.

Being a recent returnee to South Africa and a newcomer to the Western Cape, I had no idea whether driving around Khayalitsha was a clever thing for two white guys to do. I relied on Alan’s experience. So far I have found it pretty hard to generalise about personal safety in South Africa, especially in the Cape where I am still finding my bearings. Having said that, from my perspective, the most important thing one can do is actively take reasonable risks. Failing to do that in South Africa runs the risk of entrenching the racial divide. And the Cape is a place where the racial divide is still starkly evident. I live and work in very white Durbanville and Khayalitsha is only about 20kms south but racially is a polaroid negative of Durbanville.

Alan and I set out looking for shopping malls, community centres, skills training centres, or anything that looked like local IT or telecom enterprise. The first place we found was at the Zenzele training centre which we happened upon by accident. This is a very cool non-profit initiative doing training and entrepreneurial skills development in woodworking, sewing, steelwork, and a variety of other areas. They actually had an Cyber entrepreneur as one of their denizens but that particular shop/consultancy was not open on the day we visited. Once again, Zenzele seemed like they might make better clients of a Village Telco than operators.

KhaynetOur next stop was to follow up on Jason’s suggestion and visit Khaynet. Khaynet is in the Sanlam shopping centre (pictured at left) next to a busy commuter train station. The shopping mall was a hive of activity. We found Mandla Oliphant, one of the founders of Khaynet, in the cyber cafe. The cafe was busy but with few people using the computer terminals. The principal demand was for photocopies, printing, faxes, etc. In conversation with Mandla, he confirmed that demand for Internet access was fairly modest while demand for “office” services were the principal source of revenue. He confirmed that phone access is a much bigger priority for people than Internet access. Khaynet has been in business since 2003 but have struggled to find a thriving business model based on Internet services. Mandla thought that demand for low-cost phone access would be high in that region. He mentioned that the VoIP startup Digital Indaba had been offering services in the area but that take-up had been mixed due to quality and cost issues. All in all, it seemed to me that a Village Telco would offer Mandla exactly the kind of value-added services that might help Khaynet thrive.

Buoyed up by the opportunity that the Sanlam Centre and nearby train station seemed to represent, we then drove to the other side of Khayalitsha to the Khayalitsha Mall. This is a brand new shopping centre that is clearly more up-market than the Sanlam centre. Alan and I rambled about the entire centre looking for IT or telecom related enterprises. We had almost given up when we came across Silulo Ulutho Internet Cafe (pictured at right). Business at Silulo was booming. The left side of the cafe was devoted to Internet access and office services. Similar to Khaynet there was a strong focus on value-added office services although in the case of Silulo, most of the computers for Internet access were in use. On the right side of the cafe was a bank of pay phones franchised from Vodacom. This was operated by a separate business to Silulo with whom they had a relationship.

We met with Sigqibo Pangabantu, one of the owners, and he told us a little bit about Silulo. Silulo Ulutho Technologies offers a range of services from retail computer sales and service, to office and cyber cafe facilities, training, business advice and online marketing. This was one of their two office locations. In order to keep up with demand and for reliability, they maintain two Internet connections: a Telkom ADSL line and a wireless link to 24-7online. Silulo is obviously a thriving enterprise. I could see them offering WiFi voice and data services in the area. I could see a Village Telco in operation here but I could also see the potential of something like a pre-configured version of David Rowe’s IPO8 offering a drop-in replacement for the kind of franchised community phone shop service offered by Vodacom.

Both Mandla and Sigqibo have expressed an interest in finding out more about the Village Telco and the ball in now in Dabba’s court to explore the next step with them. Stand by for more news.

P.S. The map at the top of the post came from streetmaps.co.za which is currently knocking the spots off Google Maps in South Africa.