Month: December 2015

5 Things I Learned as an American Express NGen Fellow

Posted on by Case Foundation

As a member of Independent Sector’s American Express 2014 NGen Fellows cohort, I am honored to be one of a dozen leaders, under the age of 40, selected from across the country, to develop our capacity to lead, strengthen our professional networks and elevate our accomplishments on a national level. Designed to be a leadership development initiative, the NGen fellowship provides mentoring, leadership training and an opportunity to participate in a collaborative project to benefit the social sector.

As my fellowship drew to an end, I was delighted to join in welcoming the new 2015 class of fellows at Independent Sector’s annual member meeting a few weeks ago, where several of the new inductees asked me to share my reflections from the yearlong experience. It was the perfect time to pause and consider how the program affected me, and it was also a chance to assess what my own contributions to the program were. I came up with five key takeaways that I’m sharing in the hope that it will help to inform not only the future NGen Fellows, but also other young leaders in the nonprofit sector.

    1. It’s a Journey. At the beginning of the experience, I thought that filling out the application and being selected were going to be the hardest parts of the fellowship. I mean really, how hard can it be to accept a recognition, read some excerpts from a book and share some experiences with 11 other people? Turns out, it can be pretty difficult — especially when you end up challenging your own definition of what a leader is and how to lead. My peers in the fellowship and I quickly learned that we’d have to push ourselves and expand our understanding of what it means to lead. By the end of the 12-months, our cohort reflected on the experiences we had shared and we recognized just how far we had come.

      To anyone who is looking to grow as a leader, I strongly suggest taking the time to explore how others around you lead — even those who lead in a style that is different than yours or that you may not agree with. You don’t necessarily have to adopt all the different styles, but you should keep an open mind and learn from them.

 

    1. It’s Worth the Work. One of the components of our fellowship was to complete a collaborative project that benefits the social sector. With everyone on the team operating “remotely” and no one designated to lead at the outset, it was difficult to figure out how best to work together. We were left to our own devices to figure this out, and that process in and of itself was a big part of our leadership experience. It wasn’t always easy, but in the end team members took turns stepping up and taking on different pieces of the project.

      Our cohort chose to explore how the social sector might mitigate barriers and encourage stronger, more sustainable innovation by shining a light on how social innovation is viewed and practiced by those in our field. Through a partnership with the Forbes Fund and a survey of Independent Sector members and social sector practitioners, we identified ways to support more adoption of social innovation —not only in work and deeds, but also in the culture of workplaces that strive to better serve people and communities. The result was the creation of a new report, The Necessary Challenge: Understanding and Fostering Innovation in the Social Sector.

 

    1. It’s a Family. Remembering where we all began a year ago, it is astonishing to think about all of the personal and professional changes that have happened for each and every one of us — and those relationships are by far the best part of the fellowship. The network we have created has yielded new partnerships, new connections and new opportunities that have lifted up us all. Beyond even our own cohort, we are now connected to six other classes of past and present fellows, who like us are driven to create transformative change in the social sector. The personal relationships ended up being just as important as the curriculum in our leadership development.

 

    1. It’s a Priority. It’s inevitable… life happens, work happens — and in my case, having a baby mid-way through the fellowship happened. I realized early on that if this fellowship was going to work for me, I had to make it a priority. In this case, it ultimately meant investing time and energy into my own leadership development, which is much harder to do than it sounds. All too often, we sacrifice our own needs in service of something or someone else, especially when it comes to a need that is more fluid and does not have immediate, tangible results — like leadership development. Making the fellowship a priority in my life wasn’t always easy, but learning how to make time for my own development in the midst of “life” has been invaluable.

 

  1. It’s an Honor. My final reflection… I am proud to be an NGen Fellow and follow in the footsteps of talented young leaders who have paved the NGen path before me. I hope that as you are reading this you’ll consider applying for a future class, or that you will nominate someone who is deserving and could benefit from this incredible experience. Special thanks to American Express and the dedicated staff members and board members at Independent Sector who make this experience possible.

The Myth of Failure

Posted on by Case Foundation

The Myth of Failure is the fourth post in the Case Foundation’s Myth of the Entrepreneur series. This series is intended to intentionally examine, and change, the stories our culture tells about entrepreneurship. For more information on the Case Foundation’s approach to the Myth series and Inclusive Entrepreneurship, please check out our introductory piece. We encourage you to join the conversation using #Ent4All on Twitter.

The Myth of the Entrepreneur series is based on research conducted by Michael Chodos, former fellow with the Case Foundation and currently at the Beeck Center for Social Impact & Innovation at Georgetown University, with contributions from Aaron Coleman, former Case Foundation intern.

Failure is a core part of the story of entrepreneurship. Each year about 6 million new businesses start up, but they don’t last long. By five years, half are gone. By 20 years, almost all are gone.

In most of our discussions around entrepreneurship, the genuine agony, trauma and shame around failure is discussed solely as a learning experience and bump on the road to inevitable success. We promote and analyze the building of a startup, but we leave the failure part untouched until the entrepreneur has been successful with another venture. Then, that failure is lauded as an important part of their journey that made them who they are. But why wasn’t that important moment in the entrepreneurial journey something we cared about when the failure actually happened? What are the immediate learnings that could be shared?

At the Case Foundation, we understand the importance of failure. It is baked into our organization’s culture and a key part of our Be Fearless campaign. Failure is an important tool in the innovator’s toolbox. If we expected everyone to get it right on the first try, we wouldn’t have some of the most important inventions and innovations of our time. Many inventions happen incrementally, and many creative figures don’t have success their first time out. Henry Ford, Walt Disney, Steve Jobs, Oprah Winfrey and Steven Spielberg were all fired or rejected early on. Persistence and the ability to build upon past failure are what make breakthroughs happen. (Provigil) As Robert Sofia, a marketing consultant to the Fortune 500, writes, “The way in which we respond to our failures has the power to shape us. If we sulk, falter, and permanently fail, we risk being shaped in a damaging way. If we take specific steps to overcome our failures, learn from them, and improve as a result, they will make us stronger.”

But what about the downside of failure? Failure deeply affects the lives of the entire team, investors, vendors and customers. When a business goes under there are real, live people who lose their employment, families that lose their seed stage investing and entrepreneurs who can be left with overwhelming debt. The stories of why companies shut their doors can be learning opportunities for other ventures, but only if we have a culture that acknowledges that while failure to some degree is inevitable, it is not glorious and absolute failure is something that many entrepreneurs can’t afford.

When looking at the statistics on diversity in entrepreneurship, we must ask ourselves, “Are we setting up some groups to fail more than others? Or are we judging the failure of some entrepreneurs more harshly than others? And by idolizing failure, are we leaving out an entire class of entrepreneurs?” It’s easy to look at statistics like “failed entrepreneurs are far more likely to be successful in their second go-around, provided they try again” and miss the significance of that last part of the sentence – “provided they try again.” Women CEOs and CEOs of color already receive significantly less venture capital than their peers, yet we expect them to bounce back from failure just the same. But diverse entrepreneurs face additional obstacles. Because of the wealth distribution in this country, many families, particularly those of aspiring entrepreneurs of color, do not have the $20,000-$50,000 in “friends and family” funding to start a first venture, let alone a second. And if women are twice as likely as men to shut down their businesses because of lack of capital, we have to consider that factor when searching for ways to support women entrepreneurs during and after their first ventures.

Social science has begun to shed some light on the disproportionate affects diverse entrepreneurs may experience related to failure. Some researchers have begun to associate the stereotype threat, a phenomenon typically assessed in a classroom or test-taking setting, with success in other areas. Stereotype threat posits that if women entrepreneurs know that they are going to be judged more harshly when they’re pitching, they will have a worse performance. We must begin to assess the external biases that affect how we assess, value and judge all entrepreneurs, particularly those that are struggling or have survived a previous failure. And entrepreneurs must look for ways that they can begin to build up networks, mentors and role models that break down these stereotype threats and show they can survive all stages of growing a business, including possible failure.

Failure is not an enemy; it is a learning tool. At a macro level, it can free up workers to become the new team of newly forming entities that will hopefully be more efficient. It can free up entrepreneurs to pursue new ideas. And it can free up investment dollars for future ventures. However, to trivialize failure as some popular stories of entrepreneurship do or to call it a right of passage, it takes away from the seriousness of the risks entrepreneurs and their supporters face.

So the question is, how do we begin discussing failure in such a way that helps to mitigate disaster, while still celebrating entrepreneurial tenacity to overcome barriers and find success when the odds are stacked against them? And how do we ensure that failure doesn’t close the doors on entrepreneurs from particular backgrounds while leaving those doors open for others? At the end of the day, we still love the grit and determination of our entrepreneurial visionaries like Ford and Jobs, but it has to be a path available to all entrepreneurs with innovative ideas, not just the privileged few.

Join the conversation on Twitter at #Ent4All and be sure to check out the full Myth of the Entrepreneur series!

Be Fearless Spotlight: Inner City Advisors and Fund Good Jobs

Posted on by Case Foundation

This Spotlight is authored by guest writer Caitlin Kelly as part of a special blog series by the Case Foundation featuring Be Fearless stories from the field. Follow along with us as we meet people and learn about organizations that are taking risks, being bold and failing forward in their efforts to create transformative change in the social sector.

For Sean Daniel Murphy, interim CEO of Inner City Advisors (ICA) and Managing Director of Fund Good Jobs, what goes around comes around. Murphy credits the mentorship he received early and often with who he is today — a visionary entrepreneur on a mission to help others realize their business goals.

“It always starts with the family values I was fortunate enough to grow up with,” he says. “My parents, aunts and uncles, a lot of people, really looked out for me and I was attracted as a result to change some things that weren’t right in my community. I wasn’t interested in nonprofit work per se, but when my mentor gave me a shot and opened a door for me at 21, he took a chance on me. Now I take a chance on others. Building people is the way I do business.”

In its first two years in existence, Fund Good Jobs, which provides the capital and support small businesses need to grow and create good jobs, has grown into a $2.35 million fund. The Fund has invested in five companies that have created and retained nearly 150 jobs, making a positive economic impact on hundreds of Bay Area residents. Over recent years, Fund Good Jobs’ founding organization, ICA, has overseen the growth of hundreds of local businesses that collectively have generated revenues of over $200 million and that employ more than 2,500 Bay Area residents.

The companies benefiting from Fund Good Jobs traditionally have had difficulty accessing capital, though they are all dedicated to creating what Murphy calls “good jobs.” The “good jobs” movement has grown significantly over the past few years. Murphy defines a “good job” as one that offers pay above a livable wage, provides access to health benefits and wealth building tools like a 401(k) plan, offers “life ladders” — opportunities to rise both personally and professionally — and has a culture that allows employees “to really enjoy” making a living there.

Key to the movement is a focus on small businesses, which are uniquely equipped to create good jobs. They have greater flexibility to hire those who have lacked access to quality employment opportunities. As active members of the community, they tend to hire locally and are less likely to ship jobs overseas. Collectively, thousands of small businesses across the country have the capacity to generate millions of good jobs.

One of the Be Fearless principles Fund Good Jobs demonstrates is being agile and creative in its assessment of risk and the way it structures capital offerings. By deeply engaging with a company, Fund Good Jobs can underwrite deals that traditional lenders and investors won’t touch. “Traditional notions of risk have really been prohibitive for these folks,” Murphy says. By providing “support and capital” to these businesses, he says “they in turn bet on people in their community.” His fund has made five such investments so far, “people I’ve known for four or five years. I know them well beyond their business plan.” And what he seeks in them is a quality that wouldn’t be visible on a typical balance sheet.

“Character is intangible and doesn’t carry as much weight as it could with local banks and local investors,” he says. But Murphy makes smart wagers, seeking out referrals from people whose values he shares, those new business owners working seven days a week and night shifts and the ones guaranteed to be fearless.

Firebrand Artisan Breads in Oakland is one such beneficiary. The new manufacturing plant has hired 45 staff members so far, with 15 more planned. They needed $1.8 million to grow their business, but couldn’t access a loan, stuck in what Murphy calls the “Valley of Death”— loans between $250,000 and $2 million — which are the hardest to obtain. Murphy’s financial acumen allowed Fund Good Jobs to create a capital stack, a combination of local and private investors, as well as a bank. In May 2015, the organization invested $600,000 in Firebrand to finance an expansion of the company’s baking facilities, as well as to help it open retail space at a development in downtown Oakland.

In October, the group finalized a $300,000 investment in Red Bay Coffee to enable it to open a new coffee bar and roasting facility in East Oakland. The two investments prompted an additional $1.6 million of growth capital from partners Murphy found.

Murphy’s board, led by Olukai CEO Jim Harris, encourages risk-taking too, but also offers significant input “to make sure we could continue making the bold bets we’ve made,” says Murphy. “They show us how to block and tackle. They’re constantly looking out for [our] blinders. It’s one thing to be fearless and take risks, but it’s another thing to have someone keep an eye out for you.”

Another Be Fearless principle that drives the work of ICA and Fund Good Jobs is that of reaching beyond one’s bubble. Murphy currently does this by cultivating key partnerships, including with local developer Michael Ghielmetti, founder and president of Signature Development Group. “Michael has been a key supporter of ICA-grown businesses that are creating good jobs in Oakland,” Murphy explains. Signature’s latest development is called The Hive, a retail block that now houses Firebrand Artisan Breads, Red Bay Coffee and Impact Hub Oakland.

“It’s an unlikely partnership because the temptation is to put in traditional tenants,” says Murphy. “But not only is he a supportive landlord, he’s invested in these companies and [has] gotten others to invest. It’s been a different way of doing business.”

Murphy credits Ghielmetti with pursuing community oriented businesses for his latest development. “It looks cool, but it wasn’t a conventional decision on his part. Most developers wouldn’t have partnered with us. When he asks us, ‘Do you need anything else from me?’ those simple questions are a lot bolder than people realize.”

How has Murphy and his team accomplished all of this in such a relatively short amount of time? Urgency is Murphy’s middle name. “I think our team would laugh if we tried to define a time that urgency drove us. We have to learn to balance that. We live at such an urgent pace every day. Our business owners don’t sleep — and we don’t either. It’s nights and weekends, and our relationships reflect that. I talk to our business owners every day at any hour for an advising session, whether that’s midnight or 5:00 a.m., if that’s what they need.”

When investing in underrepresented entrepreneurs or riskier business endeavors, Murphy knows that it takes more than a loan to make a business successful. The entrepreneurs need capital, but they also need social networks and a support system that can walk them through the process of growing their business. This holistic approach to building up businesses and creating good jobs is what sets Fund Good Jobs apart.

Murphy adds, “We have a phrase we use here – ‘Going all in.’ I’m inspired by it every day.”

Feeling inspired? If you’re ready to begin your own Be Fearless journey start by downloading our free Be Fearless Action Guide and Case Studies.

This post is provided for informational and educational purposes only. Any references to companies or investments do not imply endorsement by the Foundation.

The Myth of Combat

Posted on by Case Foundation

The Myth of Combat is the third post in the Case Foundation’s Myth of the Entrepreneur series. This series is intended to intentionally examine, and change, the stories our culture tells about entrepreneurship. For more information on the Case Foundation’s approach to the Myth series and Inclusive Entrepreneurship, please check out our introductory piece. We encourage you to join the conversation using #Ent4All on Twitter.

The Myth of the Entrepreneur series is based on research conducted by Michael Chodos, former fellow with the Case Foundation and currently at the Beeck Center for Social Impact & Innovation at Georgetown University, with contributions from Aaron Coleman, former Case Foundation intern.

There’s no denying the natural draw of drama that comes from a good battle, whether in a sport arena, a courtroom or a theatrical stage — we love to see truth, virtue and value emerge from a defining moment of clash and competition. Think: Monday Night Football, Law & Order, Game of Thrones, The Voice, Hamilton.

So, it’s not entirely surprising that the act of proving worth through this type of “trial by combat” has also become prevalent in the entrepreneurial narrative — largely in the form of the ubiquitous pitch competition. Whether part of mainstream pop culture or down the street at our local accelerator, the dozens of pitch competitions that take place every day deliver one clear message: an entrepreneur’s true worth — and a venture’s true likelihood of success — is proven by how they perform at the pitch competition.

The ultimate example of this narrative plays out on the ever-popular reality TV show, Shark Tank. Contestant entrepreneurs appear in front of world-famous investors who hold the promise of tens of thousands or even a couple million in start-up money. They get the added benefit of face time in front of an at-home audience of nearly 10 million, and if your business and pitch sound right — and you can handle the volley of difficult “gotcha” questions from the investors — you can close a deal right then and there and the audience is left thinking your success is guaranteed.

But in reality, “winning” a pitch competition itself is a small and rare moment in most entrepreneurs’ journeys, and an over-celebration of pitch events runs the risk of perpetuating the myth that it is the only pathway to building a successful, sustainable business. Stories of winning pitch competitions do not ground the success narratives of Oprah Winfrey, Mark Zuckerberg, Lucy Peng or Steve Jobs. In fact, many of today’s most celebrated entrepreneurs would probably tell you that they would likely have lost a pitch competition in the earliest days of their companies (check out Brian Chesky’s Medium post on the many rejections he received on early pitches to raise money for AirBnB).

Building, scaling and sustaining a new business requires more than a “winning” pitch. It requires an entire support system — founders, investors, policymakers, consumers and many others — who can offer the long-term support of the entrepreneur’s dogged pursuit to solve the one problem identified as worthy of immense investments of their own time and treasure. Ecosystem builders like Mara Mentors, Forward Cities, PowerMoves and 1776 understand this; they see the pitch and everything else. For those who have concerns that the pitch competition — and the myth that it is the only path to successfully starting a business — may be disadvantaging women entrepreneurs and entrepreneurs of color, innovations on the model are cropping up. Village Capital has introduced a “peer selection model,” and Springboard Enterprises has its “Dolphin Tank” which, in their words “isn’t… a competition for the best idea, it’s about channeling the expertise of the people in the room to provide connections and advice to help entrepreneurs take the next step.” And crowdfunding platforms are proving to be a more successful onramp for women and minority entrepreneurs. Groups and models like these provide entrepreneurs with access to the collaborative networks and connections they’ll need to scale and solve meaningful problems.

Wins and losses, and the learning that comes from both, are inevitable in entrepreneurship. No doubt pitch competitions can be great forums for showcasing entrepreneurial talent, surfacing new ideas, helping entrepreneurs hone in on their value proposition and generating feedback critical to the constant iteration that is part of building a business — and platforms like Shark Tank are tremendously helpful in raising the profile of entrepreneurs and innovators. My colleague Sheila Herrling and I also recently defended the role of pitch competitions in the nonprofit sector.

But as we seek to broaden the narrative around entrepreneurship it is important that we see beyond the excitement and drama that comes from a no holds barred “business death-match,” to the full scope of developing, nurturing and growing a diverse set of entrepreneurs leading sustainable businesses.

Join the conversation on Twitter at #Ent4All and be sure to check out the full Myth of the Entrepreneur series!

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