Page 121 - Built Expressions - Online Construction Magazine - November 2014 Issue

Managing The Mindset th time with a nonproft organization During the second decade of the 20 century, manufacturing helping poor children in the outskirts employment grew 21% in the United States while the more of Buenos Aires who often went barefoot. Integrating the two ideas, traditional agriculture- related segment dropped 13%. he formed Toms Shoes as a for-proft social enterprise designed to both make money and do good. Marketing the Argentine inspired shoes to U.S. with real customers. The business through a historical pool of big data consumers on a “one-for-one” basis, models change on the basis of customer but are instead invented through a he sold 10,000 pairs in six months feedback. The company pivots to a process of management that starts and then distributed 10,000 free different strategy if customer feedback with hypotheses, which are tested pairs to Argentine children in need. In proves that the current strategy is with data. Big data will allow them 2011, Toms expanded its one-for-one fundamentally fawed, or if better to test far more hypotheses, far more business model to eyeglasses. And it ones present themselves. For example, cheaply. But data—or the machines recently announced plans to launch a PayPal started out as a way to process that collect it—won’t in itself create coffee business that will donate clean payments between Palm Pilot users. the innovative business models of the water to the poor in coffee-growing But cofounder Peter Thiel saw a future, especially those that seek to regions in South America and Africa. bigger opportunity in partnering with balance commercial and social goals. Though not yet 40 years old, Mycoskie eBay (which acquired PayPal for $1.5 has reportedly amassed a multimillion- billion). While still supporting eBay Most of my students possess a dollar level of personal wealth while his transactions, PayPal positioned itself broad world view and exude both company has given away more than 1 as a broader payment processing creativity and passion. Having taught million pairs of shoes. business with major growth in mobile, these bright minds over the past a technology not imagined at the decade, I have developed both hope for Lean Startups company’s founding. and faith in their future as managers. I won’t attempt to predict the future, The lean startup movement has also And I believe they will embrace this but I have little doubt that the future taken root among social enterprises sentiment: “The best way to predict will bring dramatic change. Change seeking young management talent. the future is to create it.” BE is the only constant. The millennials, Consider the annual competition for who are now reaching adulthood, the Hult Prize, initiated in 2010 by the grew up in the digital age and are Hult International Business School, already suffering some of its effects. which has campuses in Boston, Dubai, Despite being well educated, this group London, San Francisco, and Shanghai. faces high unemployment, massive The frst competition challenged more author student debt, and a less rosy economic than 300 business school students to Tim Laseter future than either of the previous two develop business models in support of lasetert@darden.virginia.edu, generations. Yet according to a recent the “One Laptop per Child” nonproft. is a senior executive advisor Pew survey, although millennials are The 2014 Hult Prize sought business for Strategy& and a professor less trusting of other people in general, plans for social enterprises to reduce of practice at the University of they have great confdence that the chronic illnesses among the urban Virginia’s Darden School. The author future will be better than the past. I see poor worldwide. It attracted more or coauthor of four books, including positive signs that this new generation than 10,000 applicants who competed The Portable MBA (Wiley, 2010) is embracing the hypothesis-driven in teams for six regional prizes of and Strategic Product Creation approach in order to break constraints $50,000, and a $1 million grand (McGraw-Hill, 2007), he draws and build new business models. The prize of seed funding for the winning upon decades of experience in ‘lean startup’ movement, spawned proposed social enterprise. business strategy and academia from the entrepreneurial culture of The millennials have grown up in to serve as a contributing editor of Silicon Valley, argues that initially, all the earliest days of the second machine strategy+business. an entrepreneur has is a set of untested age. Although they are aware of the hypotheses. The entrepreneur’s goal massive quantity of information now Acknowledgement should be to produce the minimum available, they understand that new Published in issue 75 of Strategy &, formerly Booz viable product to test those hypotheses business models aren’t discovered & Company. Vol: 3 Issue: 11 November 2014 Built Expressions PG121