NetSquared First Take

Put 21 groups of passionate social entrepreneurs and 300 funders, technologists, social impact experts and web 2.0 leaders in a room and shake. What do you get?

Well so far, you find that some of the entrepreneurs on stage are full of passion… and not much else. If you don’t understand a question that asks what percentage of your budget is going to come from fundraising… you aren’t going to raise any funds at NetSquared. You also find some brilliant minds working on brilliant solutions. It’s not often that startups consisting of two people and a plan get to field questions and comments from people representing such caliber organizations as:

• Bill & Melinda Gates Foundation
• C.S. Mott Foundation
• Full Circle Fund
• Geneva Global Inc
• The William and Flora Hewlett Foundation
• John S. and James L. Knight Foundation
• Omidyar Network
• Packard Foundation
• Schwab Charitable
• Silicon Valley Community Foundation
• Sunlight Foundation
• The Surdna Foundation
• The Case Foundation
• The John D. and Catherine T. MacArthur Foundation

…not to mention WackyPuppy Design.

What I’ve found interesting so far is the humbleness with which most of the nonprofits present themselves. If you’ve ever seen for-profit companies pitch for funding, humble isn’t the word that comes to mind. But I’m not so sure that if I’m a funder who is thinking about making large grants to a startup, that I want “humble” to be how I describe the entrepreneurs. If you think that you have a transformational idea that will help with a significant social problem, it’s OK to have some self-confidence or even a little arrogance.

Not everyone agrees with me. Allen Gunn of Aspiration (a loyal friend to the NetSquared community) wrote the following on the NetSquared blog about his concerns with the contest format:

The Net2 tagline is “Remixing the Web for Social Change”, but an agenda model that pits 21 promising projects against one another in public doesn’t seem to me the most likely strategy to engender more innovative mashups, interoperability or content sharing between those 21 projects or the sector as a whole. I’d be much more excited to see efforts that reward collaboration among projects instead of competition between them. The N2Y2 agenda format puts me in a veritable Prisoner’s Dilemma: do I stand in solidarity with like-minded projects in my field as I have tried to do for years, striving to interoperate, collaborate and blur organizational and informational boundaries for collective sector benefit, or do I make calculated decisions to maximize return to my organization at the effective expense of others? I tag that conundrum with “yikes” and “no-win”.

I think Allen is correct to recognize the value of collaboration. On the other hand “doing good” isn’t enough, funders want to know who is doing the “most good”. In a world with scarce philanthropic dollars, creating competitive environments is one way to allocate those dollars effectively. NetSquared is a good step in that direction and nonprofits need to prepare themselves to compete. So my advice to the projects for day two is don’t apologize for what you don’t know yet, tell us what makes you great. If you don’t think you and your project is an outstanding use of philanthropic dollars, better than all the other projects, you might want to consider a different conference to attend.

The panel judges seem to have no hesitancy to ask tough questions. For example, “Hasn’t company X been doing what you want to do for the last decade?” or “It doesn’t seem like you have any expertise in the area you are telling us is most critical to your success”. Make no mistake, today is a day for competition.

Being good at collaboration is a great competitive advantage. I’ve already seen a number of projects reach out to other projects publicly. That raises those projects’ status in my view (because they know how to play well with others, which is critical when they try to enact their mission). Collaboration is a good way to become more competitive. But you need to know when you are trying to make friends and when you are trying to win. Unfortunately, even if we’re all trying to do good, we can’t all win. There is a limited amount of philanthropic dollars and no matter how much you want to do good, if someone else can “do good better”, they should win and you should lose. The naïve belief that all nonprofits are “winners” steals food from the hungry, resources from the impoverished and valuable wisdom from those who need it.