5 Characteristics of Thriving Social Entrepreneurs – #2: Be a Good Sponge

June 24, 2015

8:00 am

In his book, How We Got To Now, Steven Johnson sets out to dispel the myth that innovation requires a mix of individual genius and an “aha” moment. Johnson writes, “Often big ideas coalesce out of smaller, incremental breakthroughs.” He goes on to tell the story of Edison and his work on the light bulb, a man and an invention we associate with genius — so much so that we often refer to the “aha” moment as the “light bulb moment”. But Johnson makes it clear that it wasn’t that simple: early patents on the light bulb preceded Edison by the better part of a century and dozens of others received patents for portions of the “invention” for which we today credit Edison. Edison himself understood that innovation and iterative development often go hand in hand, openly acknowledging that he borrowed and iterated from advancements of others: “I am quite correctly described as more of a sponge than an inventor.” It is the wise entrepreneur and inventor who understands this and applies it.

This is the second in a five-part series by Jean Case on characteristics that every social entrepreneur needs to thrive.

Pay attention

When I talk to aspiring social entrepreneurs who want to build organizations that address big social challenges through the prism of business, often I sense a hesitation as they think about taking their ideas forward. “I’m not that creative” or “I haven’t found my ‘aha’ moment yet” are common refrains. But the truth is that major movements and businesses have been built not by a stroke-of-genius new idea, but rather by paying attention to incremental efforts and finding a way to simply improve upon them. Underscoring this point was a recent article in Forbes entitled, “Silicon Valley isn’t Innovative, it is Iterative.” And Water Isaacson’s celebrated recent bestseller, The Innovators, recounts how time and time again, successful companies and leading innovators get there by being a good sponge.

Case study: The race to to democratize access to communication

Perhaps I have a special appreciation for this point, as I spent my early career helping to build the first digital online services — the companies that gave many of us our first onramp to the internet. My foray into this world was with the nation’s first online service called The Source — a text-based information “utility” for consumers that featured early versions of email, conferencing, and content that ranged from an encyclopedia to stock quotes. It wasn’t so obvious back then that there were a few fatal flaws that would limit scale and mainstream acceptance: first, all of these great services came across the telecommunications wire at the speed of 300 baud. Exactly what is 300 baud you might ask? It is the equivalent of 300 bits of data passing per second. Compare that to content delivery today that comes across at roughly the speed of 100 million bits per second. So you might imagine … it was S-L-O-W. How slow? Well, it would have taken roughly 40 hours to download the average song back then. Second, it was expensive: to access the services required a $100 subscription fee and hourly charges that ranged from $7 -$20 per hour, depending on the time of day.

But underlying this expensive, complicated, slow service was a really powerful idea — democratizing access to ideas, information, and communication that attracted some fast follower to this (then) new race of the technology age. These services had the potential to level the playing field in a way that could dramatically change the way people lived, worked, and played. But some iteration was needed.

AOL: Paying attention to past iterations

I landed at one more (failed) online service before I found myself at a small startup that would later introduce a new service, AOL, to the world. By this time, years had passed — and thanks to a number of factors, iteration had happened: prices came down, friendly graphic interfaces replaced the old text-only menus, and the speed had greatly improved. And more people came on board — in fact, a lot more people. At its peak, AOL had nearly 30 million subscribers and was carrying more than half of the nation’s Internet traffic. But the story of AOL cannot be told without understanding how it benefited from the iterative developments (and failures) of the services that went before it. In essence, AOL was a good sponge. Sure, there were many new, exciting innovations AOL ushered in from an amazing pool of talented people, but it benefited greatly from what Steven Johnson refers to as “smaller, incremental breakthroughs” that went before.

Make a better mousetrap

Today, Facebook, Google, and Twitter all benefited — and iterated — from the innovations that AOL introduced. Each of the founders of these companies have spoken about AOL as an early influence — including Mark Zuckerberg who famously “hacked” AOL Instant Messenger in high school. These businesses represent a piece of what AOL brought to the world: Facebook looks a lot like a new generation version of AOL Member Pages, Twitter like AOL instant messaging, and Google like a significant leap forward for AOL’s early content search engines. The truth is great entrepreneurs are great at looking at things and figuring out how to “make a better mousetrap” — in other words improve on an idea. Shouldn’t Kodak have brought us Instagram? Shouldn’t Blockbuster have brought us Netflix? Companies, products, and services evolve — or they don’t. No matter, there is always a new crop of entrepreneurs and innovators ready to pick up the slack and make a good idea better.

Success in failure

Being a good sponge also requires soaking up knowledge from your own spills or failures along the way as you build your company. Harvard Business Review had this to say on the subject: “There is a misbegotten belief that new growth businesses arise fully formed out of an innovator’s head. That couldn’t be further from the truth. Carefully look at the history of just about any innovation success and you’ll find a course correction, if not an outright failure.” Understanding that failure is a necessary part of the innovation process is key, but persevering, iterating and making failure matter by using the lessons of missteps as you go forward is what separates successful companies from those that do not succeed or thrive.

Launch an MVP to test the market

Lastly, don’t ignore the signals the market can give you. The MVP (minimum viable product) approach to innovation is great because quickly, with limited time and resource, you can find a way to put your idea or product in front of the market and start absorbing the market signal. MVP allows you to assess whether your idea or product resonates with the market you hope to reach, whether you have good feedback loops to assess if the pricing/business model is working and whether people find what you are offering easy, convenient and valuable. Paying attention to market signals is part of being a good sponge and innovating. In other words, as some investors quip, “Are the dogs eating the dog food?” So make sure that as a founder and leader, you keep your finger on the pulse and soak up all you can about market signals to ensure that you are building the products and services that will be in high demand.

Entrepreneurs solve problems. If there is a problem you are burning to address with a new social enterprise, before you do anything else go to school on who has done what to solve that problem. Learning what iterative steps have been taken already can save you precious time and money along the way. Look at successes, look at failures. To find new solutions to old problems it doesn’t take a genius. So commit to be a good sponge and spend time absorbing the lessons of others who have gone before you and those around you with an idea on which you can improve. And most importantly, as you take your new company forward, ensure that you have a way to soak up the signals from the markets you are trying to serve.

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Jean Case is an actively engaged philanthropist, investor and a pioneer in the world of interactive technologies. Her career in the private sector spanned nearly two decades before she and her husband, Steve Case, created the Case Foundation in 1997. A passionate believer in all things digital and the amazing potential of technology to change the world for the better, Jean and her team focus the efforts of the Foundation around many of the same entrepreneurial approaches she and Steve cultivated throughout their business careers. The Case Foundation is recognized for its leadership in leveraging new technologies and applying innovative approaches to increase giving; catalyze civic and business participation; and promote innovation, collaboration and leadership in the nonprofit sector. Jean serves on the National Geographic Society Board of Trustees, as well as on the boards of Accelerate Brain Cancer Cure (ABC2), SnagFilms and BrainScope Company, Inc. She also serves on the advisory boards of the Harvard Business School Social Enterprise Initiative, the Stanford Center on Philanthropy and Civil Society, Georgetown University’s Beeck Center for Social Impact & Innovation, the Brain Trust Accelerator Fund and the U.S. National Advisory Board to the Social Impact Investing Task Force (SIITF) established by the G8. Jean and Steve joined The Giving Pledge, started by Bill Gates and Warren Buffett in 2010, and publicly reaffirmed their commitment to give away the majority of their wealth to fund worthy charitable causes. That same year, they were named to Barron’s “25 Best Givers” list. In 2013, Jean was named a finalist for the “Most Admired Nonprofit CEO” award by the Washington Business Journal, which in 2011 named her Corporate Philanthropist of the Year. The National Conference on Citizenship (NCoC) also honored Jean and Steve as the 2011 Citizens of the Year. In 2014, Jean was conferred an honorary Doctor of Humane Letters degree from Indiana University Lilly Family School of Philanthropy.

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