12 April 2012

Entrepreneurship's Learning Curve

The purchase of Instagram by Facebook for $1 billion made a big splash this week. Now more hipster-cum-artsy photos will populate Facebook updates and will likely further find their way into Twitter. The meteoric rise by the two founders is unbelievable. This is akin to a rookie winning the MVP his first season or a singer's very first record going multi-platinum. Everybody sees it when it is a success and forgets the many failures.

I joked that the youth of the two founders made me feel inadequate with what I have done so far. Brett Keller quickly pointed out that the success of Instagram is a true anomaly. Most entrepreneurial start-ups fail with little notice (if a tree falls in the woods...). The successes get all the attention as do the unexpected failures, but even those are rare relative to what is shared.

Entrepreneurship is hard. The above video features one of my favorite entrepreneurs, Shivani Siroya. Shivani founded and now runs InVenture, a microfinance organization that targets entrepreneurs in need of credit to grow their businesses. I think she has a great idea. She is targeting the part of the market that is under-served and has the opportunity to reach business growth. Unlike the feel-good microfinance that is given to individual women who are said to be entrepreneurs in the business sense but are entrepreneurs in every aspect of their life, this is about growing businesses.

Shivani is a fellow with the Unreasonable Institute, and the video gives a glimpse into the boot camp she is going through as a part of the fellowship. The mentors featured are a bit harsh, but aim to help her and the other fellows hone and improve their ideas. Shivani reflects on the grueling process that seems to fit well into the sausage factory metaphor.

Despite having a good idea, realizing it is very hard. The challenge Shivani faces now is the same one that her clients will face even when they have the proper financing. Plenty can be learned from making this process more open. It can inject a bit of reality into the dream of entrepreneurship that the likes of Instagram encourage. Those dreams are what drive people to succeed, but can betray better sense and lead to failure.

All of this is to say that an open process allows for others to learn. I had the opportunity to learn about some of Shivani's early ideas and I hope to learn more as she continues the process. That will help me to understand the challenges she faces and improve my understanding of development interventions.

Aid and development would be best served to follow a similar standard. Let's start learning in the open. A Child's Right is one organization already doing that. The "Proving It" section of the organization's website provides a transparent dashboard telling the status of the groups numerous water points. Supporters can check up to see if wells are still operating correctly. A Child's Right will publish when water points fail and explain why. In doing so, they can help others avoid or prepare for similar challenges.

Admitting failure gained attention about a year ago, but it is only one part of a broader movement towards transparency. What organizations impress you with their work towards transparency? Share your favorites below.