The strategy of running an investment firm may vary, but the end goal is always healthy and compelling returns.
SM: So you manage Unitus as a professional investment opportunity with similar goals as venture capital firms? CB: We look at investing very much as a derivative of venture capital. I would argue it is just like venture capital and that Sequoia came in on the B round of SKS, confirms that top quality venture capital is willing to invest in microfinance. We have limited partners like a normal fund and we are structured as a general partnership.
Where we are different from a traditional venture capital fund is that we have a strong connection to a non-profit and we are formed alongside a non-profit. I think that our approach is more balanced but I don’t think we are making a great deal of trade-offs in terms of investing. All of the things a social investor is interested in are also interesting to me as a professional investor. The only difference is that the social investor will have a longer timeline than the average venture capital company which on the west coast only sits on a portfolio about two and a half years. >>>
Another innovative business model—shared access, in which an entrepreneur
with a phone provides pay-per-use access to a community—has
extended the social and economic impact of mobile phones beyond the
In South Africa more than half the traffic on Vodacom’s
mobile network in 2004 came not from its 8 million subscribers but from
4,400 entrepreneur-owned phone shops where customers rent access to
phones by the minute.
In Bangladesh, Grameen Telecom’s village phone
entrepreneurs now serve 80,000 rural villages, generating more than
US$100 in monthly revenue per phone by aggregating the demand of
(and providing service to) entire villages (Cohen 2001).
Perhaps the strongest and most dramatic BOP success story is mobile telephony.
Between 2000 and 2005 the number of mobile subscribers in developing
countries grew more than fivefold—to nearly 1.4 billion. Growth
was rapid in all regions, but fastest in sub-Saharan Africa—Nigeria’s subscriber
base grew from 370,000 to 16.8 million in just four years (World
Bank 2006b). Household surveys confirm substantial and growing mobile
phone use in the BOP population, which has clearly benefited from the
access mobile phones provide to jobs, to medical care, to market prices, to
family members working away from home and the remittances they can
send, and, increasingly, to financial services (Vodafone 2005). >>>
We discussed Design Philosophy earlier. Recently, I asked around for people’s design philosophies, and here’s one answer that I want to showcase, to kick off this discussion.
I like to keep it simple and pleasing to the eye. A teacher once said to me: “When creating something look at it like a mini skirt. Make it short enough to keep it interesting and long enough to cover everything.”
So, what is your design philosophy?
The makeup of a private equity fund can be telling. Chris highlights the composition of the Unitus fund.
SM: What is the source of the Unitus equity fund? SB: We have four equally significant investors. A quarter of our capital is provided by Omidyar Networks and Pierre Omidyar. A quarter is provided by an excellent group of socially responsible investors who are all connected to a progressive firm in Los Angeles called Abacus Wealth Management. An additional quarter is provided by friends of Unitus. The last quarter is a group of investors who, as a group, are all founders of some of the most significant investing institutions in the United States including founders of three of the largest venture capital firms on the west coast and the founder of one of the three largest private equity firms in the world. These are people who came in as professional investors but have an interest in what we are doing on the development side as well. >>>
The 4 billion people at the base of the economic pyramid (BOP)—all
those with incomes below $3,000 in local purchasing power—live in relative
poverty. Their incomes in current U.S. dollars are less than $3.35 a
day in Brazil, $2.11 in China, $1.89 in Ghana, and $1.56 in India. Yet together
they have substantial purchasing power: the BOP constitutes a $5
trillion global consumer market.
The wealthier mid-market population segment, the 1.4 billion people
with per capita incomes between $3,000 and $20,000, represents a $12.5
trillion market globally. This market is largely urban, already relatively
well served, and extremely competitive. >>>
Jobs is one of the top segments online and contribute 25% of Internet ad revenues. Job sites like CareerBuilder, Monster, and Yahoo! HotJobs are fast replacing newspaper classifieds and becoming hot destinations for job seekers and recruiters.
We have been reviewing the online job industry and have covered CareerBuilder, Monster, and Yahoo! HotJobs from a Web 3.0 perspective. The online job industry is booming and vertical search engines like Indeed, Jobster and SimplyHired have experienced phenomenal growth.
The Context for the job sites is to allow users to search or post jobs. Job sites are also moving from being mass to niche. >>>
In June 2006, Yahoo! Video was launched to promote online video sharing. The service allows visitors to search online video clips produced by partners as well as independent content providers. Yahoo shows video content from associate sites including Discovery Communications, CBS News, Buena Vista Pictures and VH1. Yahoo also has exclusive rights to show clips of popular TV programs.
ComScore data released for March 2007 ranks Yahoo second in terms of online video. The report estimated 434 million videos streamed from Yahoo constituting 6.2% of the total number of downloaded videos. >>>