Jose Arocha’s blog

1. The art of Trust.
A trusted brand is key for these kind of enterprises. There is a lot
semantics involved in the home pages of the different alternative to
Worldstock.com linking values, commerce and communities. Quite an art.

2. What is local?
It is very interesting how internet is redefining the boundaries of
what used to be a local market. Internet is creating a global market
aggregation and coordination machine connecting the local
microproducers to the wealth of the first world. This is inevitable and
it is understandable that the first experimenting with it are the
nonprofits. Nonprofits is a popular way to bring these new models that
still present high risks to forprofit minds.

3. Cross-subsidizing it!
One of the most popular business models happening in various levels is
the cross-subsidizing from an overpriced product to a underpriced
product, from an overpriced service to an underpriced service, from a
forprofit to a parent nonprofit, from rich government to poor
government, and in this case from first world market to developing
world markets.

4. The inevitable present, the inevitable future.
The comments about the global shipping of products present a number of
reasonable sustainability questions. It is funny that in any systemic
functional analysis, the transportation functions are always the first
candidates to trim and eliminate from the system to increase its value.
They add the least value in the chain. As in any evolutionary process,
the presence of these transport/shipping functions and so their
inefficiencies in the world commercial system are inevitable for some
time. But I believe they will eventually disappear in a large degree.

I foresee a future of tangibles going through the same process the
paper mail is going through with the email. In my view of the future, I
see art-craftman and women creating and shipping digital documents to
local 3D printers of different media who would print parts, products,
textiles, ceramics, etc for their local buyers. It is already happening.

Cheers,
Jose

The following is my comment to the post by Erik Sundelof ’s "Is a for-profit social venture impossible?" at the Reuters Digital Vision program blog

I think there may be many reasons why we are
better off being a for-profit as an alternative to a nonprofit in the
pursuit of wide and deep social impact. In my building of TAVOS, I
realized through the business planning of the social enterprise that
there were two ways to cover the high costs of a Latin American-scale
deployment: either dedicate my life and one of the others to
fundraising and not work directly with the people I want to serve or
look for income-generation strategies to make every community unit of
the initiative sustainable. I decided for the latter. Some of my
reasons were:

1. I rather devote myself to care of the people I want to serve and
let the market dynamics push my organization to listen, than devoting
my life to fundraising to end up detached from the end beneficiaries.

2. The communities I am trying to serve are highly entrepreneurial.
50-60% of the economy in Latin America is informal. That means that
Francisco in Catia, a low-income suburban neighborhood in Caracas,
wakes up every morning thinking how he will make it to bring food to
the table the next day. Francisco and 100 million other Latin Americans
are better served by bringing opportunities they could use to tap into
their spirit than by bringing charity that will leave them highly
vulnerable if the funding gets dry.

3. A for-profit will make the social impact sustainable and scalable
if we are serving well the needs of the target population. If we are
failing, the market will tell.

4. Embedded in my last comment, the for-profit approach forces
better learnings of the market and customers than the nonprofit
approach.

I do agree that there is a challenge in leading and executing with
integrity a hybrid social/business-mission venture. But I think that it
holds true for any enterprise today. There is also an interesting
discussion about for-profits with organizational and governance
structures that "lock" their social mission, for example: a parent
nonprofit or member association. But that is a whole new discussion.

Cheers,
jose