Weekend Briefing No. 164

Welcome to the weekend. Hello from Cambridge (Massachusetts not England). I’m here for a talk at the Harvard Innovation Labs about how business models impact legal structures selection in social enterprises. I wanted to say thanks to everybody who gave feedback on the article last week. You are really smart and your comments helped round out my thinking.

Speaking of England, I’ll be in Oxford next week for the Skoll World Forum, if you’re going to be there I want to meet up with you for a drink or a coffee. Shoot me an email and we’ll set it up.

Also, I’m always on the lookout for good newsletters. So this week, I saw a post on one of my favorite sites listing the top 25 newsletters, as I was reading through… lo and behold the Weekend Briefing made the list! Kind of a fun little surprise.

Lastly, here’s my April playlist to kick your month off on the right note.

Prime Numbers

$23 trillion – Global sustainable-investment assets have hit $23 trillion, up 25 percent in two years.

56% – There was a slowdown across the board in smartphone shipments to Africa and the overall mobile phone market share of feature phones increase for the first time in six years, growing from 53% in 2015 to 56% in 2016.

6.2 – New research released from the National Bureau of Economic Research yesterday shows that between 1990 and 2007, when one or more industrial robots were introduced into the workforce, it led to the elimination of 6.2 jobs within a local area where people commute for work. Wages dropped between 0.25 percent and 0.50 percent per 1,000 employees when one or more robots came into the picture.

Automation Will Hit Developing World Hard

Despite justified fears of obsolescence in the West, it is actually developing economies that are poised to be hit the hardest by fourth Industrial Revolution, or “Industry 4.0,” where machines are networked together in “smart factories” that have little need for human input. A World Bank report found that two-thirds of all jobs in the developing world face being automated out of existence. The problem is that, whereas countries like the United States had the opportunity to become fully industrialized (read: wealthy) before the process of deindustrialization began, developing industrial economies will not. Sub-Saharan Africa will have the largest population growth in the world over the next 30 years. If cheap manufacturing labor isn’t their path to industrialization, what will be? This is one of the best cited articles I’ve read on global automation, check it out at The Outline (6 minutes).

Elon Musk Saving Us From AI

Elon Musk is famous for his futuristic gambles, but Silicon Valley’s latest rush to embrace artificial intelligence scares him. And he thinks you should be frightened too. Now he’s trying to avoid an AI doomsday by launching Open AI, an effort to influence the rapidly advancing field and its proponents, and to save humanity from machine-learning overlords. This long form piece is less about Elon than it is about competing versions of the future. Learn more at Vanity Fair (23 minutes).

How to Close the Gender Gap

How do you solve gender inequality in software engineers? Etsy (my neighbor!) who has gone from 3 female programmers to 20 in one year suggests: 1) Build your own pipeline. Etsy sponsors a summer Hacker School, which offers grants to women looking to amp up their engineering skills. 2) Be open about appealing to women. This one’s simple: Women gravitate to businesses that have expressed an interest in hiring and retaining women. 3) Value soft skills. Turns out that valuing these skills doesn’t just attract women, it also draws in a different sort of male employee. Learn more and see some cool graphs at Medium (12 minutes).

Sheconomy

China's women under 30 years old are more empowered, adventurous and self-confident than any previous female generation. The flipside of this development is that they are now more discerning and demanding of brands. In order to win in this new reality, brand owners will need to redefine their engagement strategies by focusing on the ‘sisterhood’ – Women under 30 grew up under the one-child policy. Therefore, they tend to turn to their girlfriends as well as surrogate siblings to look for physical and emotional support from one another. Consequently, the feeling of 'sisterhood' in China is stronger than in other countries, and increasingly, many women value it above their relationships with their mothers. Learn more at Campaign (3 minutes).

Blockchain’s Disruption

The “killer app” for the early internet was email; it’s what drove adoption and strengthened the network. Bitcoin is the killer app for the blockchain. Bitcoin drives adoption of its underlying blockchain. Like email, it’s likely that some form of Bitcoin will persist. But the blockchain will also support a variety of other applications, including smart contracts, asset registries, and many new types of transactions that will go beyond financial and legal uses. It is likely to do to the financial system and regulation what the internet has done to media companies and advertising firms. Such a fundamental restructuring of a core part of the economy is a big challenge to incumbent firms that make their living from it. Learn more at Harvard Business Review (7 minutes).

DOE Bans ‘Climate Change’

A supervisor at the Energy Department's international climate office told staff this week not to use the phrases "climate change," "emissions reduction" or "Paris Agreement" in written memos, briefings or other written communication. I try to stay far away from politics, but I just wanted to say that this is a thing that has actually happened. I thought you might like to know. Learn more at Politico (4 minutes).

Rich Thinking v. Poor Thinking

One of the most controversial chapters in Brian Tracy’s book, Get Smart!, is “Rich Thinking versus Poor Thinking.” Here are some of the concepts: 1) Fearing failure. A lot of us do things not to succeed but to avoid failure. 2) Fearing disapproval and criticism. This relates to our fear of criticism and disapproval, which results in approval-seeking behavior. And when we’re seeking approval and acceptance, we’re more likely to think conventionally. 3) Something-For-Something. There is only one type of relationship that is sustainable over a long period of time and that's one where everyone wins. Tracy writes: Rich people are always looking for ways to create value, to develop and produce products and services that enrich and enhance the lives and work of other people. Learn more at Farnam Street (5 minutes).

Feedback Loop

Thanks for all the helpful feedback on my article on social enterprise business models they were all very thoughtful and helped shape my thinking.

Your business model categorization system is brilliant. I've been wanting for quite some time now to inventory social business models and never got around to doing it. The method you are proposing is helpful to guide people incorporating for-profits in figuring out whether or not they need a mission anchoring mechanism. Your articulation of the tension between the profit-motive and mission is spot on and the business model inventory is very helpful. I might think of a few additional business models to add to your list. I'll run through all the organizations I work with to try and contribute. – Bernadette Clavier, Director of the Center on Social Innovation at Stanford Graduate Business School.

I own a "good supply chain" spice company called Burlap & Barrel and we work directly with small spice farms and coops around the world. I object to your characterization of my category of social enterprise as profit-purpose tension. By working closely with farmers, I can get really high quality products that are better than my "conventional supply chain" competitors, I exercise greater control over my whole supply chain (which helps avoid contamination and spoilage), and I can tell a very compelling story to my customers, which allows me to charge a premium. I also keep my costs low by avoiding middlemen (and their markups) and buying directly from the farm. I've experienced a clear profit-purpose alignment in my business, for whatever it's worth. –Ethan Frisch, Founder of Burlap & Barrel.

About the Weekend Briefing

The best articles on innovation, impact, and growth distilled into one email every Saturday morning by Kyle Westaway – author of Profit & Purpose and Managing Partner of Westaway.

Thanks for making the Weekend Briefing a part of your Saturday morning routine. I love putting it together every week and love hearing your thoughtful insights. Feel free to shoot me an email with any feedback or suggestions. If you like what you’re reading, I’d be honored if you share it with your friends. Have a restful and thoughtful weekend.