[MUSIC]. >> So we're here this morning with Joy Anderson at Wesleyan University where Joy is teaching a class as a visiting faculty member. We have a Patrocelli Center for Social Entrepreneurship here at Wesleyan. We'll be talking a little bit more about that. And Joy comes to us from the Criterion Institute and I, I thought we would just begin by talking a little bit about what the, what the Institute does. >> Criterion is an activist organization, of all things. We actually believe in creating market activists. >> Market activists. >> Market activists. So we've had political activists, you know, Wesleyan has created a few political activists who believe they can change the rules of how governments work. They believe they can change political systems. So at its core, Criterion believes that there's no more important time for us to change the rules of market systems, of how finance works, of how entrepreneurship works. >> Mm-hm. >> Of how we build businesses. And so how would you actually create people who feel empowered to do that? >> How interesting. So when I, when I was a student, activists kind of thought the market was dead, right. >> Yes. Evil. >> So that when we activists were trying to change, get away from the market and activism was kind of anti-market in a way. >> Exactly. >> Sounds like that this has changed. >> It has. I mean, one of the amazing things that's happened in the movement of Sociological Entrepreneurship, impacted investing, is, is two things. One is a discovery that, actually, you can do good through business. That >> That you can, yeah. >> That there isn't sort of something intrinsically evil. >> Right. >> In a, you know, competitive forces of the market. The second thing, which I think is equally important, is it's not just that the market is okay, is that we made this up. >> The market. >> Hm. >> Isn't something. >> Right. >> That just sort of naturally operates. There is no invisible hand. >> Uh-hm. >> That actually, these are systems that human beings made up. And so the social innovators, the social entrepreneurs, the impact investors in the world, actually think they can change those systems. That maybe the rules of finance, or the rules of business, are not the rules that always have to exist and we can actually change how those systems work. So that's the core of what Criterion works on, is sort of how do you do that. How, how do you actually change? >> Mm-hm. How, sounds wonky, but like how do you change how things work? >> So, it's interesting because [COUGH] this course has as, as, at it's origin a, a Social Good Summit at the 92nd Street Y in the fall of 2013 and I was struck when I participated in that, that meeting how many of the speakers were coming from private enterprise. There were, there's also the UN foundation and there were not-for-profit groups, but many of the people making presentations were, from the corporations large and small. >> Yep. >> And one of the themes I heard them, coming back to was that governments had failed to do this. >> Hm. >> And that. >> And non-profits. >> And, and, and, and not, not, not-for-profits were kind of, there were small. I mean they could do certain things but they, they didn't have the reach. And so some of these big corporations were changing their, their behavior in so much for business reasons, but they were actually also positively, positive social reasons. And but they had lost, almost they had lost their faith in the governments to do things because the government was shortsighted [LAUGH]. >> Right. >> And the companies, with their eye on long term profits or long term viability or sustainability, they were stepping in to this space and because they, because they could actually create new things in this space and this sounds like. >> Yeah. >> Criterion is finding organizations that mean to do that. >> Let me cover that point first. >> Okay. >> And then ill go back to what we actually do cause. >> Okay. >> It's a day to day. So if you take those corporations or, you know, new entrepreneurs or enterprises that are for profit where they exist to create profit. >> Right. >> I actually don't quite buy, I think in some ways there's, there's particularly now, 20 or 30 years into this movement social around social entrepreneurship, there's a little less dismissal that the government has failed. >> Mm-hm. >> And a little more, how about we use all the toys? >> Right, right, yeah, yeah. >> Right, so like, let's stop bashing the government. How about we stop bashing NGOs? Let's just actually use all the possible strategies for social change. >> Right. You don't have to choose just one strategy. >> [LAUGH] You don't have to say the government failed, so we're the heroes. >> Right. Good, great point. >> Wow, governments can do some things! But if you're trying to create durable change in fisheries... >> Uh-huh. >> In Indonesia. >> Right. >> The government might not be necessarily the first way to go. >> Right. >> Right. So the idea in conservation organizations I think are classic juxtaposition of this, because the environmental movement and conservation organizations, in particular like WWF. >> And, World Wildlife Fund, and Environmental Defense Fund has basically said, regulation, policy change, is how we'll win on these fights. Okay, except, they didn't win. >> Yeah. It didn't work. And so now they're sort of saying, well, why don't we use all the toys? >> Um-hm, um-hm. >> Why don't we work with corporations as well, and launch some new companies, and participate in capital markets, so we can use all the strategies available to us. >> Yeah, I think that's a really good point and I think that was the spirit of the Social Good Summit is that we need all of these sectors to align in some respects to have the maximum impact. >> Right. Right. >> And it's very hard to get them to do that, but to dismiss one sector as being beyond repair or just being, it has failed, was really counterproductive. >> And social change is wicked hard, I mean that's the basic piece. >> Um-hm. >> And so, my one, I started working in impact investing, so most of my career is in investing. >> Mm-hm. >> And although I was a high school teacher for about a decade, and then made a transition into working in investing. One of those natural transitions. >> [LAUGH] That just happens overnight. >> They do say that, if you teach high school in New York City, you can do anything [CROSSTALK] afterwards. >> That's, I suppose that is a great test. >> And as I later launch a venture fund and I was like, I was a high school teacher in Brooklyn. I'm sorry, of course I can launch a venture fund. >> You can do anything, yeah, yeah. >> [LAUGH] But some of the fallacies in finance and in social entrepreneurship, really came from a place of arrogance. >> Mm-hm. >> That there was a, we'll come in and we'll fix everything faster, better. >> Right. >> And that backfired as well. And so I think this sort of role of humility, of really thinking through. >> Um-hm. >> If you're going to do business and social change together, you have to be twice as good at business, and twice as good at social change. >> Mm-hm. >> because it's just hard. >> Yeah. So could you give me an example or two of some of the things that have worked well for Criterion, where they, you've seen they've made a real impact. >> Yeah. So right now we work on two things actually, well, three. One is we have a community of entrepreneurs around the world, kind of community practice of leaders who on any given Tuesday, are trying to change the rules of the game. >> Mm-hm. >> And they may not be running, some of them are entrepreneurs, some of them are investors, many of them are philanthropists or program officers at big foundations. And we talk about the practices of changing the rules of the game. How do you actually do that? So that's the first thing. Our own practice areas are in two initiatives right now and we've done a few different things over 13 years, but two right now. One is we lead a movement around investing with a gender lens. >> Um-hm. >> Right? So, thinking about gender, in the context of social entrepreneurship, in the context of investing, how would we change how we did investing if we actually understood gender? And there's an, interesting background to that which I think is, we can dig into that later. >> Yes. >> The second thing is, of all things, we work on the role of the church. >> Mm-hm. >> So, thinking about churches, in particular the United States, and we have a campaign right now to have a 1,000 churches invest in micro-business in their local communities. So, how do you actually use capital in the sort of bread and butter of local communities? >> Mm-hm. >> Of very small business. And, and both of these really are about taking groups, you know, of an African American church in south Mississippi. Do they see themselves as part of creating a different economy? Or do they just sort of say, crap, this sucks, we're victims of it. And how do you actually shift those roles, which is again, this idea of market activism. >> So in market activism with with churches. The idea is to create a network of churches that have, that work in sync with each other, or can you say a little bit more about it? >> Mostly to demonstrate that we can. And, at its simplest. We're encouraging churches to think through what kind of economic relationships do they want to be in. >> I see. >> How would they organize an investment? How would they walk across the street, and loan somebody money? >> I see. >> And say all right, I've got a thousand dollars to your small business. How would we then structure that relationship? >> Uh-huh. >> Because what tends to happen. >> Uh-huh. >> Is folks say, well. Oh, you know, I don't, what if it went wrong? >> Mm-hm. >> You know? because in business all this evil stuff happens. >> Mm-hm. >> And I might lend somebody money and then they not pay me back. >> [INAUDIBLE] >> And then it ruins my relationship. >> Uh-huh. >> So what I'd rather have happen, is for them to put it on a credit card. Have that. Be bought and sold five times in the capital markets. >> Right. >> And then eventually come back and be my money that actually made all these investments happen. >> Mm-hm. >> We're trying to figure out, how do I actually have really honest conversations. >> Mm-hm. >> About what kind of economic relationships we want to be in. >> So owning the way you use capital. >> Exactly. >> Right, so rather than just anonymously circulating it. >> Exactly, so we launched this out of Clin global initiative about a year ago and its been incredibly successful in terms of getting people to rethink things which I think is back to entrepreneurship, I think there is across the board what I am so excited and you know I've run a venture fund. I was one of the founding I was the founding board chair in the gulf village capital. I've been playing in the space of social entrepreneurship for the last ten years, which is the field is not that much longer. >> Right. >> [LAUGH] Older than that. And I've had a catbird seat, because of, because of my role in good capital as a founder of a venture fund. That ended up, you know, spinning off. So cap and the hub, and all kinds of other things. Because of that role, just had an amazing seat to, to watch people do exactly what these churches are doing. Which is to say, I don't know, maybe it doesn't have to work that way. >> We can change the game. >> We can change the game. We can invent a different way of doing this. We can rethink products in the emerging market. We can rethink what are the real solutions to climate change? And, and that's what's fun. >> So, let's, let's, let's talk, I want to come back to gender later in our conversation, but let's talk a little bit more about entrepreneurship >> Sure. >> Because the the field has shifted so dramatically in the last 15 years or so and and it's, I have to say that most of the students in this class will be from outside the United States and entrepreneurship might have a different sense, a different meaning there. So I want to talk a little bit more about entrepreneurship and we'll come back to gender later in the conversation. You know the, the, the, the meaning of what, of the entrepreneur, the kind of cultural capital of. >> Right. >> Of entrepreneurship has changed so much. Especially in this country. Perhaps also in western Europe. I'm not sure, I know less about the rest of the world. You know, when I was a student activist certainly didn't think about themselves as entrepreneurs. Liberal art institutions like Wesleyan didn't think they needed to be cultivating entrepreneurship and now every school and even high schools have entrepreneurship centers. >> Absolutely. >> And they said the entrepreneur's hero has developed and, and then social entrepreneurship has developed more recently. And I, I know it's a big subject, but maybe you can give us a little bit of a sketch, especially for people watching us from outside the US. >> It's hard. because in some ways, en, entrepreneurs are just a ridiculous myth. Right. >> And the idea. >> Like a cowboy in some ways right? It's a bit of teaching a Western so [LAUGH]. >> The hero riding off in, into the sunset. It's, it's just a, it's actually a load of bunk. >> Uh-huh. >> Partly because and, and, and a lot of us talk about this. We celebrate the hero entrepreneur. Not their organizations. >> Hm. >> Not their networks, not their customers >> Right. >> Not the, the ecosystem that actually makes them successful, and that's just, that's just silly. I mean it, it, it, it means that we somehow think this individual. >> Right. >> Has a. >> All by herself or himself. >> All by, and, and usually by himself. [LAUGH] [INAUDIBLE] Just to be clear, because that, you know that a little tension there, a little gender issues. >> Yeah, yeah And race issues, and cultural issues, and you know, do you come from a culture that actually wants to promote individuals. >> Mm-hm. >> To that extent. >> Right. >> And are you, are you from a culture that actually thinks? because there's a kind of arrogance, confidence chutzpah >> Mm-hm. >> That an entrepreneur has to have to survive >> Yes. >> Or they'll be eaten. >> Mm-hm. >> So I'll come back to that in a second cause there is something that's important in that though which is the risk taking. >> Mm-hm yes. >> So for me what's important is that somebody stepped out and said you know what, this could be different and, and I will raise my hand and say I'll try. >> And that's right. And the outcome isn't assured. >> The outcome isn't ensured. And what's, what's important about understanding about entrepreneurs is that they don't have a job. >> [LAUGH]. >> Nobody hired them. >> Yeah. >> Nobody said, I'm going to give you permission. >> Right. >> To go do these five tasks on Tuesday. >> Right. >> There is something absolutely core about an entrepreneur. Who says, I don't want to job. I don't want, somebody to be telling me, what to do, on any given day. I think I can create something different, and I'm willing to take the risks. That, that takes. Where I think a lot of colleges have actually gone wrong in how they do education of entrepreneurs is, I get entrepreneurs who, who, people who graduate from entrepreneurial programs. >> Right. >> Show up at Criterion, and they're like, so, I want a job. >> As an entrepreneur. >> As an entrepreneur. [LAUGH]. >> Yeah. >> So, it's really nice that you took all those risks but I really want stability or they show up at a venture competition and say well I can't possibly do anything unless I'm fully funded for five years and I have all the stability. I said actually you don't get to have autonomy. >> Right. >> And control. And safety. >> Right. >> You have to actually buy some things. I mean, I was a high school teacher 15 years ago. I watched a venture fund. People ask me all the time. How did you do that? I said well. >> Nobody was going to hire me to work in a venture fund. >> Mm-hm. >> So I started one. >> Yeah. >> And I didn't have the capital. My parents were Lutheran ministers, and I never had money. To date I have never had a bank of capital. I built relationships with people who did, and figured out how to aggregate enough. And so it's that, it's that ability to say I'm not going to be waited, I'm not going to wait to be invited to a table, I'm just going to set the table that I think needs to exist. >> That's a great way of putting it. So does the word inventor, have a big overlap with entrepreneur. >> Well if you think about many, many inventors, not for me, cause I think actually there are inventors and innovators who sit in all kinds of different places. >> Mm-hm You can be innovative in a job. You can invent things. Most inventors actually have federal funding and sit over in the science building over there. And actually invent things. >> Mm-hm. >> It's that I think there is something in business that is different. >> Mm-hm. >> That is saying, I'm going to build the thing. I'm going to build the organization that does it. >> Yeah, that's, I see. It's not just the product, it's the platform right? [LAUGH]. >> It's not. 'because, really, for those, those who create, venture well. Not venture well, the national. The, there's a group. I don't know, I forget the acronym. >> Mm-hm. >> But there's a group that works on inventions in science. >> Right. >> On college campuses. So first thing they have to learn is like, having invented this way cool thing, doesn't mean that you have funding for it, doesn't mean that you know how to produce it efficiently. Doesn't know how to, mean you know how to distribute it. Doesn't mean that you know how to market it. All of those things that actually are what give you the autonomy. >> Yeah. >> Is that you run the business. >> So, so the entrepreneur. Eh, creates the sustainable organization through which inventions happen. >> Exactly. >> So, so that's where that platform rather than product right. I mean. >> Platform versus product. Because the product is a dime a dozen. Like, you know. >> Man that's harsh. [LAUGH]. >> I'm not, I'm not a big believer in intellectual property. I mean, I value it. I know that it's an ordinance. >> It's an ecosystem that you're looking for, right? Or the organization. >> Well, it's, it's, it's execution. Like, I've got a lot of ideas. [LAUGH] A number of them that I could execute is where it gets pragmatic. because it's all well and good to say, this is how the world should be different. >> Mm-hm. >> And this is my crazy idea that, or brilliant idea that will transform the world. If you can't get it done it doesn't matter. >> So, so, so tell me a little bit about social entrepreneurship so. >> Right. >> Cause that that hero risk taker creates sustainable organization you know builds a team around him or her usually him as you say, say the goal there is profit and sustainability through profit. Social entrepreneurship is different. And, and I think for some of our students in this class, they'll, they'll know a lot about it. But for some of them, I think it's, it'll be a new term. So, maybe you can say a little bit about how you understand social entrepreneurship, and how it has evolved. >> I think it's a little different but basically the same. It's basically some, somebody or a team of people stepping out and saying the way the world is changing right now, the way the world is working right now is not acceptable, so I'm going to use all of this risk-taking hootspa and guts, and, I'm going to go do it, to create a bit different world. I think it's really the only difference, is the intent. >> So it's not, the intent is not to is not to get money for their investors or. It's, the intent is to change the world. There's to, and make an improvement or, make a change. >> So I would almost say it's just an additive intent. You probably, you might still want to make money. >> Huh. >> You might still want to create. You know, you might want to be a big deal. You might still want to be famous. You might still have all of that arrogance. Many social entrepreneurs are very profitable. I mean, you can actually make a profit and change the world. It's hard, but it is possible. >> So, so in that sense the social entrepreneur can be.running a profit-oriented enterprise. As long as part of the intention is to improve the lives of the people who are interacting with the organization is that. >> Well I mean if you think about I don't know your role you run hopefully a profitable organization. >> We never we lose money slowly but we're not... >> You lose money slowly but your investments make, to make a profit. >> Yes. >> And you seek for your investment to make a profit. You seek every day, to figure out how to grow your endowment versus shrink it, to have it be more valuable to your students so they are willing to pay the delightful tuition that you charge. You are looking to compete in a market. >> Mm-hm. >> I don't think you're so different. >> Mm-hm. Mm-hm. >> Than a for profit company. It's just that your intent is also to create amazing students who lead the world. >> Mm-hm. We don't have any investors and who need to reach a monetary return on an investment. And so we're able to offer the class that we are taping this for, for free because we actually don't have to return at a profit for investors. We, we do want to satisfy their belief. In the mission of the organization. To educate more people. To share our knowledge. That is a return. And the people who, let's say, donate money to Wesleyan. We, you know, I'm hoping they'll be pleased by the things we do. Because we are trying to work on our, you know, to fulfill our mission. And in that sense, you know, like other companies, we have a mission. But I do think we don't have a mission, to increase the wealth of our... >> Share holders. >> Of our share holders. >> The lines, what is happened in the last 20 years. >> Mm-hm. >> Is that the lines between I'm in it for the profit. And I'm not. >> Mm-hm. >> Have gotten really blurred. A couple things have happened. One is, how you think about the market place. Right? >> Yes. >> That you have fair trade products. >> Yes. >> And then all of a sudden you have consumers that you can actually potentially. Charge a premium on a product. >> Because it's fair trade. >> Because it's fair trade, alright, that's a different logic. The second thing, and then whether or not having invested in a fair trade product that went bankrupt, you know is it working is an interesting question [LAUGH]. >> because it doesn't always work, right, yeah. >> But there is a, there's a A reasonable hypothesis that that's true. >> Mm-hm. Mm-hm. >> Second thing is expectations of investors, have also shifted. >> Yes. >> And that's complicated. There are now many, many, many investors. Who want you to both have social good, and profit. >> And, yeah. That's a good point. >> And so, the expectations of investors have shifted, and even in the public markets, in bond markets, there's a sensitivity in bond markets as to whether or not wal-mart is sustainable. Our logic about this differentiation between this is for social good and this is for profit, as if we could keep those cleanly separate. And so I think it actually, it it increases the complexity for all of us. >> Yeah. >> Because there isn't some stamp that we could put on your forehead that says Wesleyan's good. >> because it's not for profit. >> And Walmart's bad because it's clearly for profit and we can just divide those lines and know who to trust. >> Right. [BLANK_AUDIO]
