8.

Train to Be a Multi-Mission Athlete

Combine Impact and Profit-Based Goals

The rise of mixed martial arts (the combination of multiple fighting techniques like karate, boxing, jiu jitsu, and judo) represents a turning point in the history of hand-to-hand combat. Historically, the best fighters in any one discipline would face off against their counterparts in the same discipline, but this changed in the 1990s, when competitors using mixed martial arts techniques began to win the Ultimate Fighting Championship (UFC). A mixed approach is now standard. The best fighters are not experts in any one technique but in many fighting styles.¹ In addition to being one of the fastest-growing sports, mixed martial arts has become a standard training practice in elite military units around the world.²

A similar evolution is happening in the mindsets of Frontier Innovators.

The most successful Frontier Innovators are not solely focused on growth and financial returns; they consider social impact a central goal from the start, a stance that is reflected in the problems they’re tackling as well as the customers they serve. Like UFC champions, many if not most Frontier Innovators are “Multi-Mission Athletes” who use a range of techniques to hit multiple targets. More often than not, their financial and social returns are inextricably connected.

Ali Parsa, founder of Babylon Health, exemplifies this mindset. Ali grew up in Iran. After the revolution of 1979, he fled his hometown of Rascht due to his political views. He left alone, without his parents. In a grueling overland journey, he traveled to Pakistan and eventually made it to Europe and settled in London.³

His early days in London were not always welcoming. Undeterred, he excelled in school and eventually earned a PhD from University College London. Ali could have become an academic but chose to be an entrepreneur, building multiple successful ventures over the years.

In 2004, Ali underwent knee surgery. He was dismayed by the experience and felt inspired to deliver better health care and health outcomes. By all accounts, his first venture, Circle Health, was a financial success. A private health care provider, Circle Health had a vision of reinventing the clinical experience; the hospitals were designed by architects, the rooms run by hoteliers, and the menus designed and cooked by chefs.⁴ The company went public in 2011 on the AIM (a submarket of the London Stock Exchange) for more than $100 million.⁵

Yet Ali was unsatisfied with the results. The problem? Circle Health was not broadly accessible given the price point, nor was it solving the major pain point in health care: primary care. Ali sees primary care—what happens outside the hospital—as the linchpin of high-quality, accessible health care. In the United Kingdom, as in many places, the health care system is overloaded, and people turn to emergency room visits for their health needs.⁶ Emergency rooms thus face long waits due to lack of beds and staff. Ali mused, “What if we could do for health care access what Google did for information?”

That’s how Babylon was born. Through its text chat service Ask Babylon, the system can automatically perform routine diagnostic care by combining artificial intelligence and live clinicians. Babylon also offers a more-involved Talk to a Doctor service, which allows patients to speak with relevant clinicians in a live video chat and receive diagnoses and prescriptions from the comfort of their own homes.⁷ Babylon recently released Healthcheck, which helps patients to monitor their health.

Babylon Health saw early success through a partnership with the National Health Service in the United Kingdom. However, Ali knew that Babylon would have greater impact in markets with more-limited national health care systems. He next partnered with the ministries of health in Rwanda and Saudi Arabia to offer Babylon as a national service. Ali also teamed up with Tencent to make Babylon available via WeChat.⁸ Now Babylon has more than fifteen hundred doctors, engineers, and other staff on the team (and hundreds of part-time doctors) and nearly five million registered users.⁹ Babylon recently raised more than $500 million at more than a $2 billion valuation, the largest digital health fundraise in Europe.¹⁰

For Ali, the social impact of the program is key; it is its raison d’être, explaining both why he started the company and why it is so successful. The majority of Frontier Innovators resemble Ali in this way: they are deeply focused both on building commercially successful, scaled businesses, and on having a positive social impact. This plays out in the products they offer and the customers they target, their interactions across the value chain, and their role in shaping the ecosystem.

Products and Customers

As you saw in chapter 1, Frontier Innovators are Creators who build new industries. Most often, they also create and build in underdeveloped industries where their innovations have a profound impact on communitywide quality of life.

In “A Theory of Human Motivation,” Abraham Maslow proposed a so-called hierarchy of needs, arguing that humans focus on achieving needs in a certain order of importance.¹¹ At the lowest layer of the pyramid are the basic needs we prioritize, which include physiological needs (food, water, sleep, shelter, and sex) and safety needs (personal security, emotional security, financial security, health, and well-being) that underlie the achievement of all other needs, which include social belonging (friendship, intimacy, family), and finally, esteem and self-actualization.¹²

Compared with their Silicon Valley counterparts, Frontier Innovators tend to target human needs that are lower on Maslow’s hierarchy. An analysis by the Global Accelerator Learning Initiative (GALI), which shares best practices and learning among innovation accelerators around the world, confirms this trend. By analyzing the portfolios of forty-three accelerators around the world, GALI determined that entrepreneurs in emerging markets are more likely to operate in sectors that include agriculture, energy, education, and financial services.¹³

The same is true among scaled companies. A study by Village Capital determined that of the nearly three hundred unicorns in the United States, only 18 percent are focused on industries that include health, food, education, energy, financial services, or housing.¹⁴ In contrast, an analysis of leading startups in Latin America, Sub-Saharan Africa, and Southeast Asia reveals that a far greater share (as many as 60 percent of our sample in Sub-Saharan Africa) target these basic human needs.¹⁵ The sheer number of revolutionary Frontier companies focused on the lower end of the hierarchy of needs becomes increasingly apparent throughout this book.

At the Frontier, startups tend to focus on the mass market from day one. While they naturally choose particular subsegments to target first, they rarely select the elite. More often than not, this mass market strategy responds to practical reality. Unlike in many developed countries, where there is a bell-shaped normal income distribution that bulges around an affluent middle class, in many Frontier markets the income distribution is heavily weighted toward the middle and bottom of the pyramid (see figure 8-1).

Thus, the only viable customer market at the Frontier is often the mass market.

River on the Go

In 2013, Deepak Garg and Gazal Kalra were thinking about how to help transform the Indian economy.¹⁶ In their work at McKinsey & Company, they were struck by the comparative inefficiency of the Indian logistics system. Road, rail, and coastal shipping are 30 percent to 70 percent more expensive in India than the United States. This inefficient logistics network costs India’s economy a staggering $45 billion each year, accounting for 14 percent of India’s GDP.¹⁷ Yet the country has an acute shortage of drivers, needing almost double the available supply.

The shortage is a reflection of interrelated challenges. The first is drivers’ working conditions. They face unsafe roads, corruption, long hours, and days away from home.¹⁸ Because of the fragmented industry, drivers travel to the delivery location—sometimes over several days—and upon arrival find that there may or may not be a return shipment available. Either they wait for a new load, or they return home with an empty load and are compensated only for one direction. Truck driver wages are low and often volatile, in part due to this dynamic.

To disrupt this vicious cycle, Deepak and Gazal launched Rivigo, based on a logistics model that is centered on drivers (referred to as “pilots”) and improves their experience on the road and at home. Rivigo’s motto is “Making Logistics Human.” Rather than have pilots drive the entire length of a trip, they drive for five or six hours to a relay point. Another pilot takes that load and keeps going to the next relay point, and onward to the final destination. The original pilot swaps their load with another and drives it back to their original relay point, where again it is transferred to another driver. Rivigo’s endlessly complex daisy chain allows pilots to return home each day and earn more, because trucks are driven at higher capacity thanks to the company’s investment in technology to automate shipment coordination and demand planning.

Rivigo and other Multi-Mission Athletes aren’t merely creating jobs; they’re increasing the quality of employment throughout their value chains. Job creation on its own is a key aspect of entrepreneurial social impact: Endeavor estimates that fast-growing entrepreneurs, while representing less than 4 percent of the market, create disproportionately 40 percent more of the jobs in the field.¹⁹ Indeed, new firms less than one year old are responsible for more than 1.5 million jobs every year for the past thirty years in the United States.²⁰

But as we know, not all jobs are created alike. Multi-Mission Athletes like Rivigo can set themselves apart by building their business models around the needs and expectations of some of their most key constituents—their employees. Rivigo’s strategy is working. By the fall of 2018, Rivigo had more than ten thousand trucks in its network, along with team members in five hundred micromarkets to work with suppliers.²¹ Rivigo has expanded its logistics services to include cold freight storage, express brokerage, and a freight marketplace.²² Rivigo completed a $50 million Series D round valued at more than $1 billion, for a total of $170 million in debt and equity raised since its launch only four years ago.²³

The Rise of the Social Enterprise

For many people, the MMA mindset may sound similar to social entrepreneurship—an emergent field that, depending on the definition, spans companies with market capitalizations in the billions as well as small nonprofits. Over the past decade, the field of social entrepreneurship has gained increasing recognition from private funders, public officials, and university professors worldwide. Social enterprise initiatives, courses, conferences, and clubs have become ubiquitous on top university campuses, as young people aim to found organizations that integrate impact and profit. Prominent foundations have developed impact strategies that focus entirely on supporting and scaling social enterprises. Between 2003 and 2018, social enterprises received approximately $1.6 billion in foundation grants globally.²⁴ In short, social entrepreneurship has become an industry, and a hot one at that.

Perhaps because this important movement has grown so big, it continues to escape a singular definition. The central element of a social enterprise is the use of business-minded approaches to solve social problems. But social enterprises might be nonprofit or for-profit, or they might use a hybrid model; approaches vary widely. Some social enterprises consider scalable or profitable businesses a secondary objective to their desired social impact, while others see profit generation and scale as the engines that drive impact. Each company or nonprofit balances the needs of investors and shareholders with the desire to have a positive impact on customers, the environment, employees, and so on, in its own way.

For the purposes of this book, it is reasonable to say that while few social enterprises are leading technology-based startups, many leading Frontier startups share characteristics of social enterprises. Multi-Mission Athletes are deeply focused both on building commercially successful, scaled businesses, and on having positive social impact at the same time. They are not trading off profit versus impact. They are inherently doing both due to their business models.

This approach represents a departure from Silicon Valley norms, in which most entrepreneurs perceive startups and social enterprises as distant cousins, even though nearly all Silicon Valley founders are convinced of, or give lip service to, their “change the world” ambitions.

To build their balanced businesses, Multi-Mission Athletes focus less on the purity of the intention and more on the construction of the business model.

Impact Tied to the Business Model

What sets Multi-Mission Athletes like Babylon Health and Rivigo apart is the way they build impact in to the business model. Babylon Health’s economic and social impact interests are fully aligned: to scale, Babylon will need to convince the NHS and other ministries of health that Babylon demonstrates better clinical outcomes and is more affordable than alternative options. The company also receives immediate feedback from users, who will adopt the platform only if quality of care is high and the experience is convenient.

For its part, Rivigo is able to attract more drivers to the platform when it increases the percentage chance that drivers will return home within twenty-four hours, with a full load in both directions. This outcome in turn increases Rivigo’s ability to scale its logistics platform and serve customers effectively across the country.

Creating a business model that aligns social impact and economic best interest is no easy feat. It is so difficult that leading Silicon Valley companies have only managed to implement “do no harm” policies, back-end giving programs, and lackluster corporate social responsibility policies. Take, for instance, Google’s promise, “Don’t be evil.”²⁵ It commits to treating its customers ethically, even though it is in its (short-term) economic interest, and its shareholders’ interests, to maximize profit; this could mean, for example, using customer data in more personally invasive or nefarious ways to sell more ads. When social impact (or avoiding negative impact) runs counter to business interests, instituting an “avoid evil” policy is equal parts reassuring and alarming.

Many companies have good intentions and implement generous programs to give back. The Pledge 1% organization encourages firms to offer 1 percent of any or all of the company’s stock, employee time, products, and profits to causes that matter.²⁶ Some Silicon Valley corporations have created parallel structures that include a charitable foundation arm. Others leverage buy-one, give-one (BOGO) models; for every good purchased, another is donated or sponsored. These models have their heart in the right place, but some of them yield mixed results. The BOGO model in particular has been criticized for its negative externalities. Toms Shoes didn’t consider the repercussions of its initial BOGO model for local shoemakers and ended up distorting shoemaking markets across Africa and putting people out of work.²⁷

For each of these companies, from Google to Toms, back-end impact is not a foundational part of the business model. If the business does not perform well, it is easy to cut back-end giving. This is not meant to diminish these programs. They are commendable. But a crucial difference remains: each of these approaches gives money after the company has made its profits. Impact is not rooted in their business models in any substantive way. As Ross Baird, founder of Village Capital, would say, this is “two-pocket” thinking: one pocket makes money, and the other gives it away.²⁸

Multi-Mission Athletes are doing everything in the same pocket.

You Are What You Measure

For Multi-Mission Athletes, impact is directly correlated with business success. But this does not mean they track revenue and assume that impact has correspondingly occurred. After all, as they say, “You are what you measure.”

The best Multi-Mission Athletes carefully reflect on their desired impact and decide how to assess success. They then assiduously track, report, and disseminate information about progress toward this goal across the organization. In many cases, the chosen impact metrics align with or are complementary to the company’s financial metrics, because impact is part and parcel of the business model. Still, it is a challenging feat, in part because there is no universal, easily quantifiable impact measurement system. Just like Darwin’s finches, which varied by island in the Galapagos, a Multi-Mission Athlete’s chosen impact metrics are necessarily unique to its industry, context, and business model.

As Deepak Garg explains, “It’s the principle of karma. We are focused on giving back and solving the problem. This is our language and our company’s shared beliefs. Pilot metrics are leading indicators of our ongoing success.”²⁹ While Rivigo naturally tracks financial metrics like cash flow and revenue, it gives equal weight to its own measures of success in solving the challenge of quality of life for drivers and efficiency in the logistics system. Rivigo therefore measures the percentage of pilots returning home within twenty-four hours and the number of loads filled in both directions.

For consumer-facing companies like Branch, M-PESA, M-KOPA, OkHi, and Zola, where impact is linked to product adoption, key metrics are tied to the number of customers and the level of usage.

For Gojek, impact is about entrenchment in society and the economy. CEO Nadiem Makarim is focused on growing market size (his target is to double or triple the size of any market Gojek enters). Nadiem tracks the incremental earnings of drivers and service providers and the employment opportunities he creates. In Indonesia, Gojek has become the largest income source in the country, with more than one million people earning income through the platform.³⁰

Ultimately, metrics are tied to the objectives of the business and the mission. Deepak likens his approach to the banyan tree, which can live for hundreds of years and grow to staggering widths of more than six hundred feet.³¹ As Garg explains it, “The banyan tree is the world’s longest-living tree. The reason is because of its entirety: its roots give back to nature. Its impact is in and out. That leads to its growth and survival.”³² Multi-Mission Athletes see giving back to employees, customers, investors, and the ecosystem as fundamental to their companies’ longterm growth.

Sector-Level Impact

A Multi-Mission Athlete’s impact is not restricted to building successful, scalable, and socially impactful businesses. Multi-Mission Athletes often take on even broader, sector-shaping roles.

Chapter 1 discusses the mobile banking pioneer M-PESA, which not only has a direct impact on its customers but also has created an entire revolutionary sector. Because of M-PESA, customers can now access a range of formerly nonexistent services. M-KOPA, which offers rent-to-own solar home systems that replace unsafe kerosene lights, would have been impossible without M-PESA because of the prohibitive cost of collecting hundreds of thousands of small payments. A range of other services use M-PESA as well, from new private schools like Bridge International Academies to public sanitation projects.

This ecosystem is a direct enabler of the original business. When applications are built on top of M-PESA, they not only result in more transactions on the system but also reinforce the habit-forming nature of mobile money and, ultimately, the competitive moat it enables. Multi-Mission Athletes are accomplishing similar sector-building feats in education, health care, financial services, and more. As Babylon Health scales, Ali Parsa will enable a range of service providers—like pharmacies, hospitals and other health care providers—to plug in to the system.

Successful Multi-Mission Athletes spur ecosystems in other ways as well. M-PESA demonstrated the potential to develop and scale a mobile money platform, and an entire industry exploded on the back of this innovation. Now there are more than 250 replica mobile money deployments that serve more than six hundred million people worldwide.³³ Demonstrating the success of the model may also inspire a range of replicators in other markets. Similarly, as Rivigo scales, it will enable a range of other platforms to thrive, leveraging cheaper and more-efficient logistics, all while changing the lives of drivers and their families.

Frontier Innovators’ impact can further extend to the entrepreneurial ecosystems in which they work, as you saw with Hotels.ng and Shopify’s efforts in building the local human capital pipeline. Chapter 11 plunges into the myriad ways Frontier Innovators actively build their ecosystems.

The Multi-Mission Athlete Role Model

The lessons Multi-Mission Athletes offer us are particularly germane today. While Silicon Valley continues its steadfast march toward providing us with the best photo-sharing apps, the Frontier presents a powerfully different perspective and model. This alternative conception is crucial for the United States and other highly developed countries as we increasingly look to business, and particularly innovators, for solutions to society’s challenges. And US society is not short of challenges. In the United States, sixty million people are financially underbanked (including 53 percent of African American households, and 46 percent of Hispanic households).³⁴ More than five hundred thousand people in the United States are experiencing homelessness.³⁵ Student loan debt has soared to forty-four million borrowers, owing in aggregate $1.5 trillion.³⁶

The public, the government, and regulators are holding companies to a higher standard than they did even ten years ago. Witness what Larry Fink—CEO of BlackRock, the world’s largest capital provider—stated in an open letter to the CEOs of public companies: “Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate. Without a sense of purpose, no company, either public or private, can achieve its full potential.”³⁷ More recently, the Business Roundtable, an association of CEOs of the largest companies in the United States, redefined the purpose of a corporation, explaining that beyond the maximization of profits, corporations have a role in supporting many external stakeholders including employees, suppliers, the community, and the environment.³⁸ Whether business leaders will deliver on their rhetoric remains to be seen, but this cultural shift suggests that we have moved beyond generic “do no harm” mission statements and should now expect much more from our companies.

Innovators win when their customers and their supply chains win. Building a Multi-Mission business model, where impact is aligned with profitability, is not easy, but if the model works, it can be a recipe for success and change. CircleUp, a lender for startups, examined the relative performance of traditional companies versus mission-aligned benefit corporations, or B Corps. Among consumer companies, the average consumer brand ranking on their platforms was 5 out of 10, while 75 percent of B Corps had brand rankings of 9 or 10. This translated directly into sales performance as well, with B Corps seeing sales growth rates three times as high as the average consumer company.³⁹ Researchers at Harvard Business School, Northwestern University, and Causeway Capital determined that firms with good ratings on sustainability issues that directly related to their business models outperformed those with lower ratings and traded at a premium to their peers.⁴⁰ It is still early days, but others have documented the power of mission on governance and on the quality of asset management practices at a company.⁴¹

Being a Multi-Mission Athlete can be a key enabler of many of the strategies outlined in this book. When building A-teams, Multi-Mission Athletes can more easily attract mission-aligned candidates and compete with other firms. When raising capital, they can access a wider and more diverse set of pools, including government and donor capital—although they may struggle to attract those venture capital firms that still erroneously equate impact with lack of returns. When working with the ecosystem, they are more likely to find supporters and sponsors that buy in to the mission and look to support the organization.

Some people argue that balancing multiple missions of scalable businesses and social impact requires trade-offs. For Multi-Mission Athletes, however, there is rarely such a dichotomy.

Many developed ecosystems, including Silicon Valley, are rife with intractable social issues, including homelessness, unaffordable health care, poor public education, and much more. Learning from and adopting the practices of Frontier Innovators not only will help us solve these pressing challenges but also will empower the next generation of Silicon Valley innovators to tackle problems beyond the photo-sharing app. Much as I love my photo-sharing apps.