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Crowd-Sourcing Innovation & CFOs for…Um, Everyone

August 8, 2013

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Tonight I went to a cool social dinner called Innovate Berkeley.  It is a monthly meetup where Urban Innovation Exchange (UIX), the HUB Berkeley, and the Office of Economic Development bring folks together, with no real agenda but to enjoy a delicious dinner from a local chef, chat amongst yourselves, and hear a very short talk by an interesting “featured innovator”.  Jennifer (I believe), the Sustainable Business Coordinator for the City of Berkeley, explained what a potent combination it is to simply bring the business sector, academia, and the government into the same room.

Tonight the “featured innovator” was Mike North, “celebrity PhD engineer” (really?), who used to host a show on the Discover Channel called Prototype This!, and who is now doing some really cool work with his organization ReAllocate, which “engages world-class engineering and design talent to work real-world problems.”  In a way, it’s like Kickstarter where you post your “real-world problem” and hopefully attract smart people to contribute their brainpower for your project resolution.

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Already, ReAllocate has done some interesting work crowd-sourcing ingenuity for food storage systems in rural Alaska, clean water systems in Nepal, and a low-cost treatment for children with club feet across the world.  Until now, it’s clearly been mostly mechanical engineering projects, but how cool to find a way to tap engineers of all types, designers, economists, and whomever else to help solve your change-making business problems.  (Would love to crowd-source the mastermind engineers and designers of the world to figure out how to quickly/easily/cheaply set up infrastructure and operations for regional food aggregation and distribution, and low-cost customized and/or modular equipment for smaller scale farmers, but that is a dream for another day.)

As Mike explained: What amazing things you can do when you engage the community to validate and co-design solutions.  So, that’s Great Idea #1.

Great Idea #2 came up while eating delicious food from Hugh Groman (owner of Phil’s Sliders, Hugh Groman Catering & Green Platters) and chatting with Alan (aspiring Maker entrepreneur), Polly Armstrong (CEO of the Berkeley Chamber of Commerce – yes, I just linked to their Yelp page!  They want to turn the Chamber into an Innovation Community Center, how cool), and Bob Fukushima (landscape architect & San Leandro food justice advocate).

Cutting to the meat of the conversation… Question: what do these all have in common:

  • Local businesses who can’t stay in business paying staff as much as minimum wage.
  • Restaurant owners who hire 10 part-time staff so they don’t have to pay health benefits for 5 full-time staff, even when managing 10 staff is much more burdensome.
  • Service people working multiple part-time minimum wage + tips jobs as a standard.
  • Farmers who don’t know profit margins or cost-benefit analysis re: which channel to sell their products through, and running ragged juggling order processing, truck deliveries, and staffing for the myriad channels.
  • Grocery stores that can’t afford to manage fresh flower inventory and therefore put all the inventory costs and liability on the supplying farmers, who then go out of business.
  • Produce distributors whose margins are so tight, they milk supply and demand dynamics by marking up scarce product prices more than 200% when it’s actually available for half the price to buyers through other channels.

Screen Shot 2013-08-08 at 11.48.33 PMAnswer: If each of these businesses had a CFO to help with basic financial analyses of their operations, at least half – if not most – of their problems would disappear.  Obviously, the business model in itself has to be sound.  And,  just crunching the numbers certainly won’t ensure your business success.  But, at least with a CFO-type person helping to identify profit centers, helping cut “dead wood” (read: activities or operations that are bleeding the operation dry), and calculating optimal pricing and inventory based on actual historical/market data, these enterprises would have a much higher chance for survival.

What would it take to disseminate CFO skills applicable to these fundamental industries, and fast?  How hugely impactful that would be.  The government’s Small Business Development Centers (SBDCs) were created to do this, but they are falling far, far short.

How to develop new ways of teaching business and financial skills to the masses?  Informal learning networks, I’m going to say, layered on community development networks, oh yes!

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