So how do we learn?

Campfire
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Recently a few people gathered in a rented house on the outskirts of Athens to discuss the present state and the future of Edgeryders LBG, the social enterprise built on top of the Edgeryders community. I suggested we enter an acceleration programme as a way to build awareness of what we want to do and come up with a plausible plan to get there. in 2014-15 we turned around about 110,000 GBP. Not enough to survive, obviously. But how much is enough? How high should we aim? How can we get there so that the journey is interesting, and people in the community are empowered to participate in the action and the relative prosperity that the action builds? I simply have no idea. We are all too inexperienced; the acceleration programme might provide the help we need to figure this thing out (and I have started researching it).

To my surprise, people in the room did not seem to think this acceleration program was such a great idea. We need to learn, everyone agreed, but that is not the right way. But how, then? “From each other, like children” said @Matthias. This would work a lot better if at least one of us had domain experience in the consultancy business, or simply was a pureblood entrepreneur filled with animal spirits. Unfortunately, that is not the case.

@Noemi and I are tentatively up for taking the Unreasonable Institute program in 2016. However, if we do that, that will make us the de facto leaders (“the people with the plan”), and I am not sure everyone is prepared to accept the leadership of someone on the basis of having done a complicated spreadsheet aka “the business plan”. And yet, a plan is needed for me.

Does anybody have any brilliant ideas?

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Three different kind of applications

OpenConsultancy is a set of processes, methodologies and tools to surface and harness collective intelligence towards any problem in an enabling environment (platform and events) that is costly to maintain.

Clients and most protagonists within the community and company are outcomes oriented. Even if we know the collective intelligence is key to achieving credible proposals for how to achieve the desired outcomes, people will not put attention, time and money to support processes unless they are packaged as services that help us achieve our “selfish” objectives, i.e. result in tangible opportunities to build outcomes we want .

Building those opportunities (what we think of as paid OpenConsultancy gigs or funded research projects) requires a rare combination of skills and a lot of time. This currently being generated through hard work from core of Edgeryders LBG that is not visible at the moment.

After the retreat it struck me that it makes sense to understand and build Edgeryders LBG not as one thing but as three different components.

  1. Platform for collaborative project building and collective action.

  2. Individual flagship projects which operate as businesses that use (and pay for) shared administrative and digital infrastructure provided by Edgeryders LBG.

  3. A technology-aided service for matchmaking between funders/investors and trailblazers.

The proposal to join accelerators makes total sense for each of the components separately because they have separate metrics, paths to sustainability and potential revenue streams.

I am up for crafting applications to, and participating in, accelerators for one or more of the three components. And suspect the same is true for others :slight_smile:

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focus

What came to me when I read Nadia’s comment was that one of the reasons I (without thinking too deeply) was sceptical about the accelerator was that it seemed rather too unfocused. Projects that will benefit most from an accelerator will be noes that are clear about what they are about and how they are going to make money from it. I suspect what Edgeryders Lbg needs is a sort of shorter, pre-accelerator programme that helps you/us get clarity about who you/we are and what you/we are about.

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“Unfocused”?

If everything is clear you do not need an accelerator, you just need to execute what you clearly need to get the clearly desirable goals.

In fact, if I had the ear of a wise, smart, experienced business person ready to give us advice I would ask fairly precise questions. I would start from the results of the bootstrapping phase, that proves there is at least some demand for consultancy services that (1) use collective intelligence instead of professional consultants, and hence (2) connect the client with radical people on the edge and their practices. I consider this our core business until proven otherwise. Once this mythical advisor is informed about this, I would ask her the following questions:

  1. What non-billable services (admin, comms etc.) does the Edgeryders billable consultancy work require?
  2. Realistically, how big must Edgerdyers grow in order to fund those non-billable services from the margin earned from the billable consultancy work? This depends on (a) nature and cost of core services as per question 1, (b) margin.
  3. Opportunities: are there other billable consultancy products that we are not currently supplying and arise as a natural complementarity of what we are doing already? Example: could we make a product to help organisations think like networks? If there are, how do we roll out and transform them into business areas?
  4. How can Edgeryders as a corporate vehicle better serve the community's projects? Fellowships "no string attached"?  Joint projects? Starting companies of which ER is a partner together with the person proposing the project? How does that feed back into the core business?

Questions 1 and 2 are about equilibrium conditions: ensuring that we can do cool stuff without exploiting ourselves to provide the non-billable stuff for free. If this is not ensured, we are not viable and the company will die. People will be tired of being underpaid and will retreat to non-Edgeryders work; which means that no one will be manning the non-billable stuff, which includes the sales; and with no sales we are dead in the water. You answer them by solving the equilibrium condition on yearly turnover, then figuring out a plausible growth path to get to equilibrium turnover. Business types call this “writing the business plan”. It requires spreadsheets and knowledge of the consultancy business (example: I recently learned that if you do digital communication, 15% is the upper bound of the margin you can get. But if you do cleaning services, you can get 40% – not sure how much exploitation is involved).

Questions 3 and 4 are about business development. 3 seeks to extend and strengthen the core business. 4 seeks to bring into focus the emerging ER ecosystem, and in a way is about reinventing the incubator. 4 in particular is an area in which we have failed spectacularly: there is no obvious reason why the Viral Academy and the unMonastery are not prosperous little economic entities, humming away and closely connected to ER. Instead, we have a graveyard of ruined relationships and wasted opportunities. Hah. Addressing them is more of an exploratory exercise: the ideal person to give advice on 3 is someone who knows inside out certain markets in consultancy (eg. management consultancy) and can tell you “here are some needs that these people have. How would you address them?”). The ideal person to give advice on 4 is… probably someone who built incubator-type stuff and crashed them.

@Patrick_Andrews, I imagine this degree of clarity is enough to engage expert advice, and would be surprised if the average budding entrepreneur entering an accelerator were clearer than that. Then we can call it acceleration or pre-acceleration, but in the end you need to come out with a business plan, some plans to enter into at least one new market (including contacts with people who can serve as entry points therein) and a collaboration model that you can propose to at least one community project to serve as prototype. If you have none of that, you are flying blind, which is what we are doing now.

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MOOCs + exchange in kind?

I like the structure here. To my mind question 4 is probably the one with the most potential - perhaps even more if you turn it around. How can the community stuff be accelerated by routing it through ER? (E.g. what engagement forms are inclusive, sustainable, and fail “non-catastrophically”?) The precise answer to question 1 may be influenced through this as well.

A conservative estimate of question 1 would not require an accelerator program though. This is probably something you can get sufficiently precise numbers from literature, or perhaps a MOOC on entrepreneurship, no?

Question 2 ditto I would expect. The interesting question to me is here: How is the ratio of successful/failed applications, and how does that break down into work hours. If (and I am pretty sure of that) we don’t like what we see there, which levers should we be pulling on? Bring in more people to grant writing? Train more ( http://www.welcomeurope.com/europe-training-subsidies/fp7-innovation-projects-obtain-fp7-funds-european-research-projects-153+53.html )? Pile more experts into each grant? Apply more (where are the bottlenecks, how to “protect brand”)? Focus more?

Question 3 is very interesting as it could improve the running costs/income ratio. It sounds to me like the natural next step in business development. Possibly some “learn from each other” / exchange in kind method could work for this. Of course then the question is with whom (on our side, and their side)?

Honestly, I am not sure I can suggest good people here. I know a handful in the consulting business (freelance, E&Y, McK) but I am not sure they could bring much to the table for this question. But who knows, if it helps you seeing who are potential allies and who are definite competitors…

Perhaps the chances would be better with people that moved back out of consulting into entrepreneurship.

On the margin: Anecdotally, the margin in specialized technical areas can be very high, and this probably an area that is generally fairly well suited for Open Consultancy for several reasons.

On pure management consultancy there is of course a broad span from scraping by (or not) to the big four.

On my general discomfort with entrepreneurship schools/accelerators: Put bluntly I see many of them as either (1) an extension of a dysfunctional education system that can’t land people in paid work, and thus starts charging people for making their own workplaces (in pretty much the same racket). (2) A middleman that tries to insert itself between doers and investors in order to secure a cut and control direct access to investors.

Mind you, this is a general statement. I saw lots of interesting people on the mentor rosters, and I am sure this really works out for all side in some instances.

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Different entrepreneurship models

I had another look at the Unreasonable Institute and my impression was that they were pretty weak in the EU region. They seemed to be fairly good at hooking you up with mentors - something you were looking for I believe.

Trying to be constructive, I’m not sure how much you know about other models, e.g.: http://translate.google.com/translate?hl=en&sl=auto&tl=en&u=https%3A%2F%2Fde.wikipedia.org%2Fwiki%2FFraunhofer-Gesellschaft .

From my little experience they were generally on the more reasonable side of start-up funding, naturally strong in the tech field, and they have a dedicated venture arm now (which I did not interact with). Also, I wonder if they (http://www.fraunhofer.pt/en/fraunhofer_portugal/home.html) have a 2016 challenge and we could line up a few students from there with Open Care? @Dorotea does that happen to throw any sparks on your side?

There are probably loads of other models out there (apart from US/Silicon Valley style). Perhaps others can recommend some?

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Hit and miss

A veteran of several MOOCs, I just do not think a MOOC is a solution. We do not need “frameworks” or “toolkits” or generalized wisdom like “Be ready to respond to opportunities”. We need specific actionable knowledge that applies to us, here and now.

I am willing to consider any venture arm, though remember: Edgeryders is a not for profit, and this alone means we are not eligible for 95% of existing programs. But in general I am drawn to people who are not corporates: what does a lifetime employee know about entrepreneurship? And Fraunhofer… well, it is a well respected juggernaut, sitting right at the centre of the FP7 Death Star (below). And I do not have an X-wing fighter handy smiley

A better idea for “learning from each other” might be Erasmus for entrepreneurs. We have less than six months to do an application.

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Uh… that is an interesting map. Nice. Funny enough the Fraunhofers are not terribly prestigious compared to MPG or even DFG (internally). Officially they are non-profits as well, though I am far from sure their venture arm is. And the other question would be if they see themselves pushing (perhaps not funding) non-profits like ER. They sure know how to network :). Maybe I can fire up one or two old contact there if you want to give it a shot.

Another thought I just had is if one could go around the sparsely connected fringe of the net and look for consulting opportunities among the nodes.

On the MOOC front I’ll go with your judgement. I’d have hoped people have come up with more actionable content in the field, but then again I am not surprised if this is not the case.

When I have some time I’ll look more closely into the erasmus thing. Of course of the 7 local contact points there is not one in city #2 of France. It does look interesting though…

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Re Erasmus

Have you been able to find the intermediate orgs (IO) who do the match making? I wonder if you can/should go in with a experienced host (EH) already selected? Would you already have a list of places you’d be interested in, or should I help look for candidates? I assume SME (non-profit) financing is what you’re looking to learn more about, perhaps consulting?

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That accounts for a good part of my reservation about this as well, Patrick.

The other part is that I’m not sure how well an accelerator is suited for consultancy-type activities. Most of them seem to assume a model of “build a product, then conquer the world with it”, whereas what we need is steady development of something that will never turn into a billion-dollar business.

And I fear that doing an accelerator becomes another way to procrastinate on actually developing activities.

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And yet…

@danohu:

Then he said to them, “The Sabbath was made for man, not man for the Sabbath."

In other words: we are not going to develop some makebelieve product to take over the world just to please an accelerator. We need help with developing this company, and we will only accept help that works for us. If they cannot provide it, we’ll look elsewhere.

Your last point is, I think, unfair. We are no procrastinating. We have spent over two years developing the business. We have started with practice. I now strongly feel this is no longer enough. I may be wrong, but at least I’m wrong for the right reasons.

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Alberto, you’re right, some of that is me unfairly dumping on you a bunch of my general discomfort around the idea of accelerators.

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Learning from each other like children

Perhaps there is an opportunity in the absence of “domain experience in the consultancy business” as @Alberto mentioned. I think the red-in-tooth-and-claw for profit business world is also very interested in Edgeryders domain experience – that’s certainly what I took from the Forum for the Future event Alberto connected me to.

What would happen if ‘classic’ consultancy could be persuaded to engage in some kind of knowledge exchange that would help inform Edgeryders’ decision about an accelerator program, or simply equip it to compete without one? Or generate the connections to a broader range of mentors without the formal accelerator?

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In kind exchange?

You mean “in kind exchange” with some traditional business consultancy? There’s an idea. Could you name anyone in particular?

And while we are at it, could you write a short post about your experience at Forum for the Future? I have been meaning to ask.

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I’ll get something written up - might be quite short though, I’m not really sure what there was to report.

I can’t think of a particular partner, I’ll have a think. Might be interesting to chat with Hub Westminster to see if they have any leads.

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Short is good…

… don’t worry. But you see how this goes:

Me: “We need help! We should enter an acceleration programme.”

Others: “Nah. Better do XYZ instead.”

Me: “Great idea! Where do I start? Who do I talk to?”

Others: [Fade to background]

It’s quite a frustrating situation. People have ideas, but they so far have not led to anything actionable!

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How about

We go through the list of mentors they have at UI and shortlist a couple whom we approach directly for an “in kind exchange”? There are a lot and some are based in Europe or will likely pass through Brussels once in a while at least.

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UI?

@trythis, what is UI?

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Done this

To a very first approximation:

  1. Nancy Gaines (Denver) – Ex- high-profile management consultant, now "following her passion of serving others".
  2. Rick Carlson (Aspen) – Experience in sales (but tech sales)
  3. Frankki Bevins (Denver) – McKinsey....
  4. Jorge Calderon (San Francisco) – Also a consultant. "Jorge’s practice helps capital sources and operating companies transform intentional social purpose into economic and positive impact value."
  5. Karen Gibbs (Boulder) – Consultant, but focusing on small artisan businesses.

Everyone is in Colorado except for Calderon.

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Next iteration

Jorge, https://twitter.com/Venturethoughts/status/587789535704145920 , looks good, contact directly or through http://impactstrategyadvisors.com/

Nancy, does not look too mobile, but she definitely consults: http://www.nancygaines.com/consult-with-nancy/ perhaps Check http://www.nancygaines.com/toolsresources/podcasts/  (e.g. 40) if there is something coming close to what you are looking for, [edit: she does: http://www.meetme.so/NancyGaines]

Rick, https://www.facebook.com/Verific-Design-Automation-100448363329771/timeline/ has customers (or trade shows) in Europe. He looks pretty solid, but also not cheap

Karen, http://byhandconsulting.com/consulting-services/ definitely does consulting, but not sure if her focus is what we’re looking for

Frankki, has some EU background (Spain), seems to focus on US healthcare now, not sure how to contact best

In general though the Unreasonable Institute (used to) run 75% of budget by philanthropic funding (see on their “failure page”). I wonder what that does to the total cost vs focus on our needs.