Unreasonable Institute Teaches New Paths to Social Missions

And so, to foster some practical zaniness, Mr. Epstein is a co-founder of something called the Unreasonable Institute, in Boulder, Colo. For the last two summers, he has helped preside over this academy for entrepreneurs who want to solve social problems and make some money, too.

Part schmooze-fest, part group hug, this six-week program connects entrepreneurs with one another, as well as with executives, investors and thinkers who might help them. Its name derives from a quotation by George Bernard Shaw: “All progress depends on the unreasonable man.” For good measure, Mr. Epstein recently had the world “Unreasonable” tattooed on his derrière.

Welcome to the age of the spreadsheet humanitarian. The central idea of the Unreasonable Institute is that profit-making businesses can sometimes succeed where their nonprofit counterparts might falter. Mr. Epstein, 25, and a serial entrepreneur, says the Unreasonable Institute wants people who are willing to think big, even when skeptics scoff.

Competition is stiff. This year, about 300 people vied for 26 spots. Many who have attended praise the program for its networking opportunities. Some  have even gotten businesses off the ground.  

 One of them is Ben Lyon. Two years ago, Mr. Lyon, a recent college graduate in international relations and economics, was in Sierra Leone and feeling highly discouraged. Through a nonprofit group, he had tried to start a pilot program meant to allow microfinancing organizations to receive loan payments via their cellphones. But he just couldn’t get it off the ground.

Today, he is running Kopo Kopo Inc., which is based on that earlier effort. With four full-time employees in Kenya, it offers a mobile payment app that helps people make purchases in areas where banks don’t exist or where fees are too high for the poor to open accounts.

How did it happen? Mr. Lyon, 24, originally from Hanover, N.H., attributes his success to a commercial structure he created with the help of the institute. So far he has raised nearly $1 million from institutional investors.

 “We select for-profit ideas that we think have the ability to meet the needs of at least one million people,” says Mr. Epstein, who founded the institute along with Teju Ravilochan, 24, and Tyler Hartung, 26.

The selected entrepreneurs include people like Myshkin Ingawale, 28, of Biosense Technologies, which makes a device that tests women and children for anemia; Luis Duarte, 30, who started YoRecicolo (I Recycle) in Monterey, Mexico; and Jamie Yang, 31, founder of a EGG-energy, a company based in Tanzania that sells rechargeable batteries through a portable power grid.

The institute conducts its program at a fraternity house it rents at the University of Colorado. The six weeks are intense and communal. Fellows sleep three or so to a room. A chef prepares three in-house meals a day. The fellows dine at a table seating 60, alongside mentors who might include the chief technology officer of Hewlett-Packard or the former director of Google.org.

On any given day, the fellows might go on a hike or a bike ride with a potential investor, attend a workshop about building corporate partnerships, or take part in “family pitch night,” when two entrepreneurs present their companies to the rest of the group for feedback. At the end of the program, the fellows travel to San Francisco and pitch their ideas to a group of investors.

Mr. Epstein says market-based solutions are important in spurring economic growth throughout the developing world.

“This is really in contrast to the prevalent model of international aid,” says Cynthia Koening, 33, who attended the program this year. Her company, Wello, based in Rajasthan, India, is aimed at people — most of them women — who must walk long distances to bring drinking water to the home. Her cylinder-shaped product allows women to roll water home from the source rather than carry it on their heads, which can be dangerous and time-consuming.

Ms. Koening says the decision to run Wello as a commercial business — it will sell its product, the WaterWheel, to consumers — was an easy one. “When people make choices in a market economy, they are deliberately choosing the solution that best meets their needs, she says. “Also, we don’t want to have to depend on donor grants and donations. That’s not sustainable.”

MR. LYON, of Kopo Kopo, agrees that it’s time to use more commercial muscle to help solve global woes. His company plans to generate revenue through small subscription fees. “The nonprofit space has been so massive but has had disproportionally little impact in solving some of the world’s biggest problems,” he contends.

But investors can be leery of commercial social ventures. One obstacle is due diligence. Investors generally “can’t go to Liberia or New Delhi to kick the tires before they write a $50,000 check,” says Nick Flores, investment director at Investors’ Circle, a network of more than 150 people who finance businesses with a social or environmental impact.

Article source: http://www.nytimes.com/2011/10/23/business/unreasonable-institute-teaches-new-paths-to-social-missions.html?partner=rss&emc=rss