nuance intelligence

For those of us interested in alternative economics, it was a very interesting week on the Front Range of Colorado.  There was significant activity among and between many groups who are innovating better ways to flow capital (financial capital, sure, and also social, human, intellectual and natural capital) through our economy and society.

Slow Money, a movement that evolved from Investor’s Circle, is a new network of investors focused on making long-view investments which accept below-market rates in addition to social and natural captial returns related to localized, organic food systems.  Fast Money metaphorically defines the success of Boulder’s TechStars web 2.0 startups, which are moving at speeds reminiscent of Silicon Valley circa 1998.  Local money was at the hub of the Business Association for Local Living Economies (BALLE) annual conference.  And sustainable money reared its head in the form of a new bank that has been founded from the ground up on sustainable principles.

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My new partners / clients / co-conspirators at nuPOLIS are up to some awesome work in the field of social innovation.  If you haven’t heard about them yet, please go take a look.

nuPOLIS is a blog and info repository for the work of a network of some of the most impactful and influential innovators in social systems — from poor schools to urban sustainability, immigration to workforce development, and much more — who advise leaders in government, foundations and NGOs.

They recently developed an outline of how to build a national network of labs devoted to R&D in social systems, modeled on the corporate R&D system.  This work evolved into a recommendation they sent to the Obama administration’s transition team at the Department of Labor, and bears some attention from those of you active in developing innovative social solutions.

This excerpt really delivers the essence of the concept:

In contrast [to the corporate model of R&D], the process for developing social innovations is far more fragmented, less disciplined, slower, and lacks clear financial incentives.  Except in exceptional situations, social entrepreneurs are isolated from each other and the means for scaling up ideas; are undercapitalized; have weak due diligence and market-testing processes; have weak connections to private businesses and markets; and depend substantially on the philanthropic sector’s idiosyncratic and relatively small “capital markets.”

With only some modest exceptions, the social sector lacks a robust applied R&D function.  Design, development, and prototyping work is either done by “think-tank” oriented enterprises that lack practical connection to the field; by individual social entrepreneurs who lack access to a historical knowledge in the field; or by poorly capitalized NGOs that lack the technical discipline or resources needed to do the development well, and whose funding drivers too often create incentives to take something to the market before it has really been proven successful.

The federal government has a well-defined system for investing in key applied R&D sectors – through its network of national labs and a number of federal agencies that fund key research (such as the National Science Foundation).  These investments are focused on the areas of the physical sciences and life sciences.

We think the field of workforce development is a field where a national applied R&D function could have a potentially large impact on economic productivity and national competitiveness…:”

Cruise on over to nuPOLIS, have a look, and share your thoughts on this important innovation.

I was recently interviewed as part of a survey of Denver’s telecom industry. On the table was the question of the future of telecom in Denver and Colorado. Our discussion brought to mind a premise that has stuck with me for almost a decade now.

In his 2001 book, As The Future Catches You (review), Juan Enriquez advances the premise that intelligence, innovation, wealth and progress will be focused in a tiny set of locations, measured more accurately by zip codes than states or cities. For instance, he points out that innovation happens in Cambridge, not all of Boston. In Enriquez’s view, these tiny hubs of intellectual activity will have an ever-widening gap with the rest of the city / state / country / world. And if you’re not in one of them, you’re nowhere.

What’s the nuance? As we watch the U.S. economy tumbles and inflation takes hold, tenuous infrastructure will start to fall apart.  Already gas prices are making suburban living prohibitive, and it’s just the beginning.

Places like Silicon Valley, Boulder, Cambridge, Ann Arbor and others will continue to deliver value through innovation; value that will be recognized globally, regardless of the power of the dollar.  Life outside of these hubs will become tougher and tougher, as is already demonstrated by the massive housing price drops in many parts of the country.  This leaves major questions about cities and communities on the bubble.

Can the globally strong Caterpillar save Peoria?  Will a telecom revival support Denver?  Civic and business leaders are going to have to turn to new strategies in order to answer those question in the affirmative, working together like never before.

My long-time co-conspirator and current business partner Kevin Johansen wrote a good column last fall that got picked up recently at Entrepreneur.com.

He highlights how the tools at the core of the Entreprenurial Standards Forum provide a statistically-based gap analysis for entrepreneurs.

Data generally finds its way into a database through the application of a mix of archival, collective and “swarm” intelligence. Archival intelligence is about what worked in the past. History, which we are doomed to repeat if we don’t study it, is archival intelligence. Collective intelligence is about what worked today. Collective intelligence is best-practices sharing. “Swarm” intelligence is about problem solving and making things work better.

Building a database–a knowledge archive–of almost any sort is an investment the builders hope to see pay off. In the case of the Angel Capital Summit, a community-wide event hosted by the Rockies Venture Club on Nov. 13, the Entrepreneurial Standards Forum, a Colorado-based nonprofit, made this investment. They did it for entrepreneurs in specific and investors in general. For the ACS, it paid off well.

It sure did.

What’s the nuance?  Our tools radically improved the fundamental performance of this annual conference where entrepreneurs pitch potential investors, which had been staid for over a decade.  Not only was the Rockies Venture Club (RVC) able to review more than 4 times as many applicants, but they saw more companies present, and a much higher percentage (probably a 7x multiplier) receive funding, making it both qualitatively AND quantitatively the best of these events in Colorado in at least 15 years.

Next up is the Colorado Capital Conference, and the upcoming launch of our own platform, the Business Catapult.   Stay tuned here for more information this spring.