Seizing the Opportunity: How to Build Meaningful Businesses in an Upside-Down World
Adeo Ressi, CEO @ Founder Institute
Startup Grad School Stage
Ascent Conference 2020
[00:00:02] Hi there, everyone. My name is Adeo Ressi, CEO at the Founder Institute, and I’m excited to talk with you today about creating companies that matter in these interesting times. For a quick background on me, an introduction. I’ve been an entrepreneur for twenty six years, spent a lot of time of those twenty six years in New York City, and I’ve actually built in the first half of my career to separate billion dollar companies. And then in the second half of my career, I’ve been focusing on making the entrepreneurial journey easier for people who are creating companies all around the world and for investors that are backing those companies all around the world. 21 has been an interesting year for all of us. We have been struck with a series of natural disasters and a pandemic that has really changed the face of industry and changed humanity forever. Things that we once saw as insurmountable challenges to the future of our health and well-being, such as the oil industry, have been brought to their knees by the changes that are happening in the world. And this has created enormous, unparalleled opportunities for entrepreneurs all around the world in the past. If you wanted to go and disrupt a major industry like oil, it might have taken you months and years to get something even basic off the ground. Today, with all the changes that are happening at a rapid pace, the same entrepreneur with the same vision can launch something and change the world in a matter of days and weeks. We are seeing this happen every day that goes by some of the largest. Tech IPOs in history have occurred just recently because of so much transformation that is happening in the world. So whether you are an entrepreneur with an idea or an investor looking to support that entrepreneur right now is one of the best times in history to start a business and not just any business. It’s one of the best times in history to start a business that matters. And I want to talk a little bit about that today. Starting businesses that matter and funding businesses that matter. So. I think it’s clear that businesses that matter are where the future is, but if it’s not, look around and it will become clear quickly. All industries of humanity are changing. And I speak with a number of successful entrepreneurs about this concept of signals from the universe and manifesting. So if you look around at the world today, we’re getting fairly clear signals that the path humanity has been on is wrong. We’re getting these signals from the massive wildfires in California that are destroying industries left and right. We’re getting these signals from the pandemic that has disrupted industries all around the world from travel onward. And all these things are telling us that what we have been doing today is not healthy for the planet, it’s not healthy for ourselves, and it’s not a viable way forward for humanity. So the definition in the simplest form of an impact business is something that’s that’s taking humanity on a brighter path with a more beautiful future at the outcome, creating new opportunities for us to shine and release our beauty into the world. So let’s let’s get a little bit more specific about what an impact company is and then let’s talk a little bit about how to fund them. And hopefully that will lead you and inspire you to do some amazing things. So we have taken an a an effort to think about defining what an impact company is. And thankfully, there’s a body, an organization that has done an enormous amount of work in this already called the United Nations Sustainable Development Goals by the United Nations. But these goals are impressive. There’s 17 of them and they cover everything from poverty, food, health, equality all the way through to regeneration of land and regeneration of our oceans.
[00:05:07] If you look at these 17 goals, I don’t think that anyone in their right mind can argue that they are a great roadmap for humanity and they are designed to be completed by 2030.
[00:05:21] The problem, however, is that they’re really designed to be completed on a macro scale by governments, by large companies and the like. You as an entrepreneur might look at the goals and say, hey, I believe in no poverty, I believe in gender equality. But how do I translate these, you know, abstract government or societal level constructs into something that matters to me? Right. So it’s a great roadmap and it’s an inspirational roadmap, but it doesn’t necessarily translate right into something in an entrepreneur or an investor can use today. So what we’ve done at the Founder Institute, which is an organization that I run, we’ve taken the time and we’ve mapped all hundred and sixty nine subgoals of the 17 main goals into startup focused KPIs or key performance indicators, things that you can measure. We call these impact KPIs or KPIs. So now if you are interested in starting an impact company, starting a company that’s working on something that matters, we have a roadmap for you and it works as follows. First, look at the 17 UN Sustainable Development Goals and outline your mission or vision with one or more of those big picture goals. And there’s 17. I promise most of you will probably align with one, even if you’re not an impact company. Next, you go through and say, which of these KPIs is most compelling to me, right? And you can choose and I KPI that fits what you’re doing, especially as should be easy to do if you’re an impact company. And we published this document and find out CEO Declaration 5.0. Declaration where you can see all these copies, but you also have the ability to add and or change them, so if you see any copy that you like, but it doesn’t quite match what you think is important, you can propose your own IC, API or even all through the IRC API that’s there already. So now you have a. Vision or mission for the business that is aligned with one of the 17 UN Sustainable Development Goals, step one, and being an independent company. Second, you’ve identified or crafted and I KPI that you think you matches your business needs. And now, third, you start building your model and building your back end and building everything to collect your performance against that KPI. And you publish it ideally on your website once a month or more frequently if you can, where you update everyone on how you’re doing with respect to moving the needle. So it might be the number of poor people that you are able to assist out of poverty, for example, is a nice KPI and you may track that and give updates. Even reports at least show the KPI growing over time. So those are the three steps that we believe are important to define yourself as an impact company and 20 to money and work on something that matters. And we need everyone who’s inspired right now to work on something that matters. And I’m going to talk a little bit about a fundamental change that I see happening there and then switching to the investment side. So right now, we have the largest companies in the world are facing thangs, an acronym and ironically, a also a something on a snake that can can bite you and often poison you. That stands for Facebook, Apple, Amazon, Netflix and Google. These companies are evil. They are not creating positive outcomes for the world today within the ranks of what they’re doing, at some level, they’re doing positive things for the world. But if they the way that I look at the value of a company to the future of humanity, not right now. This is very simple, right? If they want away. Would the world be better or worse, and I can safely say that with all the organizations that I just mentioned, if they went away, the world would be better. Amazon is destroy local retail, destroyed opportunities for innovation in the retail space, etc., not much different for Google and the the the distribution of information, most of the major media outlets have been decimated. That’s led to this plague of fake news. And I can go on and on and on and their model of taxing the Internet. In fact, most of the companies aforementioned actually do tax the Internet. So why do I bring that up? Because we need people instead of creating another Google, instead of creating another Facebook, instead of creating another Netflix, we need people that are going to work on things that matter. Right. Let’s talk about what matters before we jump into the funding side outside of the UN Sustainable Development Goals. Right. Hitting the UN Sustainable Development Goals basically takes a society that is careening off the side of the road into a ditch at high speed and a broken down car and gets us back on the road, you know, clean car ghast going forward, but not about to self destruct. And beyond that, we need to start thinking about important things such as healing, OK, the problems that we see in the world manifest from problems that are within ourselves. And we need to start thinking about ways to help humanity heal individual and collective traumas and problems that are holding us back from reaching our potential. We need to be thinking about regeneration more broadly than the UN goals. So how do we treat traditionally in order to do something, we engage in a very destructive process. For example, we create jobs that no one wants to do and people have to travel often half hour, one hour, up to two or three hours a day to to get to, then we say, OK, we need a bridge. So we go to, let’s say, Australia, we strip mine out or we ship that or to China. We we we we turn that or into steel. We shift that steel to wherever the bridge is needed. We destroy the environment around where the bridge is coming and we refashion that steel into a bridge to nowhere, to nothing that helps really not the person in the car going to the job they don’t care about, not the environment that was destroyed around the world to make this thing happen.
[00:14:00] Frankly, I’m not sure who benefits from the existence of this bridge, but the entirety of its creation is a destructive process.
[00:14:09] So we need to be thinking about regenerative processes that instead of destroying things, create more biodiversity, create more opportunity, create more beauty, more happiness. Right. These are the things that matter right now. Beyond regeneration and beyond healing, there are other areas, as we see, some of them are obvious and some of them are less obvious business and finance, which I’ll talk about in a little bit because we are already working on them. At least I’m already working on them. Beyond that is education. The pandemic forcing kids to study at home has really allowed parents and teachers to understand the flaws of the current systems that they’re using to teach children. I’ve certainly learned a lot about the education system that I had suspected but did not know by spending much more time with my children who are here right now with me at home being educated. And I think education has a lot, a lot of fundamental work that needs to be done. We are teaching children to take jobs that don’t exist. These systems and curriculum were built for work opportunities in the 70s, 80s and 90s. And those work opportunities just simply don’t exist anymore, maybe maybe in a very limited form. But they are. But they are way out of alignment with what we’re educating our children to do. So education is another massive one. And then last but not least, social another. And very interesting thing about the pandemic, at least for me, is that it’s it’s we had ever shortened our attention span with engaging our friends, engaging with strangers. It’s just like I’m at an event. I’m at this. I’m at a party. I meet you. It’s like five minutes and gone. The pandemic has slowed everything down. Right. It’s given us opportunities to meet with people and spend time with them over sometimes hours and days. So I’ve been in order to socialize, I’ll take a test. My friends will take the test. Unfortunately, we’re in a hot spot here in California where the infection rates are concerningly high and they’ve shrunk a little bit, but still on the whole, uncomfortably high. So everyone gets tested and then we hang out as a group for usually a weekend or something like that, maybe camping. And that gives a lot of time to meet and engage with people in a way that’s going to last.
[00:17:14] Right. It’s not. So I met them at a party for five minutes. It’s like I meet thousands of people week or month or year and in low touch, non meaningful ways.
[00:17:28] We have an opportunity to build a world where we can meet people in high touch and very meaningful ways and stay in touch and learn about them over a period of time and gain from each other’s insights and experiences. And this is profound. And so Social has enormous opportunities for change as well. So, again, going through a healing regeneration business, you finance, you have education and you have social needs for change. And they are coming because people like you and people like me are deciding to do something about the world and make it a better place and make it more and more beautiful for us to live a want time before while I’ll talk about finance first and then I’ll go back to the business side of of of what I’m working on. So. I run something again called the Founder Institute, and I guess maybe I’ll do business first because talking about the Founder Institute is essentially the business side of what I’m trying to do. So. For a long time being, attack entrepreneur was a very elitist thing, you needed to have access to a computer, which not everyone had for a long time. You know, I started in the 90s and I actually started using computers in the 80s, early 80s. So, you know, long before most people had a computer. So all of these things for a long time made entrepreneurship very elitist, which is why for a long time, most of the entrepreneurs were white men and most of them venture capitalists. That funded them were also white men. With the Founder Institute, we are in ideas stage accelerator. And what that means is we take someone who has an idea and we don’t care what race you are, what gender you are, what sexual preference you are. You have an idea and you’re not exactly sure how to turn that into a business. So you come to the founder institute and and we help you over the course of three and a half months to turn your idea or your dream into a business. And part of the reason I was talking before about impact and the other side, which would be things that matter, is that at the Founder Institute right now, we operate in two hundred and twenty five cities and create a few thousand new businesses a year. And we want 80 percent of every company that we create to have.
[00:20:29] A definition of impact or be an impact company.
[00:20:35] And so back to how on the business side, I want to to have a positive effect on the world in terms of the impact side and in terms of working on things that matter. So for me, empowering a person that didn’t have a chance. To create something before because of their gender, their. Sexual preferences, their race or whatever, even their economic circumstance, I wanted to change that, right. That, to me is working on something that matters, empowering people to be the best versions of themselves. And then in terms of the impact side or. Yeah, in terms of the impact side, getting 80 percent of our portfolio to be impact companies for me feels like impact. And some people have asked like, why isn’t it 100 percent when we launch companies and in places like Kabul, Afghanistan, and we had an all female graduating class of entrepreneurs in Kabul, Afghanistan. Now, those entrepreneurs were not working on what we would define as an impact business. But creating the female led businesses in Kabul, Afghanistan, to me is impact because it goes to the U.N. SDG No. Five of gender equality. And if there is a place in the world where gender equality is problematic, I think, you know, ground zero is is Afghanistan and Kabul is more liberal than the countryside, but it’s at least a good start. Now, let’s talk about the finance side for a minute, which was my original goal was to do at this point. So within this context, what we realized is that. Finance is very slow moving to catch up, so we’ve over the course of the 11 years, the founder institute, you know, we’re creating thousands of businesses a year and we’re working to 80 percent of them to be impact. And we brought entrepreneurial ecosystems up all around the world. We created things that have allowed global entrepreneurship, entrepreneurship to thrive. But finances is is in that same period of time that that the global entrepreneurship may be moved like an eight out of 10 finance move, maybe not even a one point five. In fact, the greatest period of change in venture capital was due to some initiatives that I did in 2007 called the funding, where venture capitalists were really doing quite devious things to founders, bad term sheets, confusing terms, changing terms, just overall poor treatment. And so I created a review site where founders could anonymously rate venture capitalists, which, by the way, led to literal death threats and end the VC industry changed in the course of about three years. They stopped doing most of the bad practices. So it is possible to change finance. It’s just not easy. So we’re trying again. This time we released something called VC Land through the Founder Institute, and the initiative is to create a thousand new venture capital firms between this year and two thousand five. And we’re doing quite well actually providing more. And those venture capital firms will be led by all sorts of people. So first of all, they’re all around the world and they’re led by all sorts of people. So we have GPS, which are general partners for these funds, whom are black women, gay men, you know, from Africa to to South America, Europe, North America, everywhere, everywhere and every kind of person. And this is, you know, seeing a lot more women. I lead funds in Europe, for example, is a big deal. So it’s a very male led environment right now. And these funds have to agree to an oath to join the program. And it’s called the Menza itself. And the SO is based on the Hippocratic Oath. And the Hippocratic Oath is quite interesting. I mean, if you haven’t read it, I strongly recommend that you do, because doctors that treat you in theory, agree to it. Now. Similarly, we believe that finance professionals should follow in health, so we took the Hippocratic Oath and we fashioned something called dementia services, and the NHS basically ensures an ethical code for finance professionals to do the right thing. And that may seem kind of obvious. Right. But you could argue that many of the world’s problems today are the basis of finance professionals doing the wrong thing, allowing monies to be transferred to finance terror and violence around the world as a simple example.
[00:26:41] They know.
[00:26:43] Right, they know it’s not a surprise when phony accounts are being sprung up, they know.
[00:26:52] And they let it happen.
[00:26:55] It’s got to change, you know, so we’re starting with venture because honestly, there’s still not much better they don’t do bad things, but at the end of the day, most venture capitalists are in it for the money. And what I’m trying to convey in these programs and hopefully messages like today. We need to have a bigger meaning and purpose to everything that we do if we’re going to fix the rampant destruction that we’ve levied on this planet for the last few centuries. So finance professionals will play an important and vital role if we create the thousands of impact companies per year. We need thousands of impact investors ready to help them, and that help will come in the form of capital and hopefully that help will come in the form advisement and other things that venture capitalists will start to specialize and differentiate one another from the field. So one venture capitalist might be an expert in supply chain and able very well to help someone who comes with a supply chain company to build those and grow worldwide and maybe make are highly inefficient supply chains, more efficient in the creation of that company, saving us tons of resources. But I’m seeing all sorts of fascinating venture capitalists emerge because of the Menza ourselves and because of a program that we’re running called v.C that. So like the Founder Institute program, that’s three and a half months and we take someone to dream and we graduate someone that’s created a tech business and succeeding building that tech business. V.C Lab takes someone who’s dreaming to create a venture capital firm to help entrepreneurs. They have values and they believe in the concepts of them inside cells. And then over the course of four months, we help them to build the fund using some of our best practices from other programs that we run. So far it’s been amazing. As I said, our goal is a thousand companies per thousand funds by two thousand twenty five. Year one, we had hoped maybe 50 and then you get to 100, 200, 400, if you double every year and you’ll you’ll break a thousand in five years. So far, it looks like in year one, which is 20, will launch 100 funds. And the program has been so successful that a number of funds look like they’re going to do a first close inside of the four months of the program duration, which is exceptionally fast because most of the GPS are coming to us with an idea. Some are a little bit further along, but they’re starting at the idea level. And so to actually take money in as a venture capital fund and four to six months puts you in, and especially for a new manager, which is someone who hasn’t run a fund before. This puts you in an exceptional league. So we’re we’re seeing amazing new funds emerge. And it’s about time. Because if we can create the companies that are going to have a positive impact on the world and replace the damage that’s been done by fame, and we can create these funds to help those companies that are going to to make the world a more beautiful place for everyone on it. Then we have a shot of actually hitting the 17 UN Sustainable Development Goals by 2030. And we have a shot at building a future that we are proud of.
[00:31:17] On a planet that we’re happy to live on. And a time when human beings take a next evolutionary step.
[00:31:31] Colonize another planet. And start to build a future that we can even dream of. So with that said, you have a role to play. We all do. And it’s your time now to think about what that role is, and I’m not saying that everyone should be an entrepreneur nor an investor. I know those two fields probably are less than two percent of the human population. That’s OK. Everyone has a role, right? And just take the time to reflect on what your role is, the impact that you want to have, and if you’re working on something that matters and you know I’m here to help. So if you have what I was going to do Q&A, but it’s not working for some reason. So I set out for that Q&A. We’re not going to sell the full time. So I’m just, you know, easiest way is either LinkedIn or Twitter. You can also tweet at me and I’ll see what I can do to try and help because we’re all in it together. And it’s not an easy journey that we’re on right now. There have been times when it’s been easy, but it’s also been really beautiful because as you look at things in a hard way. Because everything around you has changed, it gives you an opportunity to see new things, new ways. Let’s make those ways into reality. Thank you very much, everyone. Have a beautiful day. Good luck with the rest of the.
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