On Zopa II

I was browsing Zopa again today and realised I made a mistake in yesterday’s post. It turns out you can see the borrowers just like Kiva, so it is even better than I originally thought. A truly brilliant company.

On crisis and opportunity

It’s all doom and gloom at the moment amongst the commetariat. Ambrose Evans Pritchard predicts a depression no matter what we do saying that it will take years for the toxins to wash through the system. I disagree. What we are seeing now is the breaking apart of 20th century capitalism to make way for its replacement. Nobody knows exactly what will happen, whether the bailout will fail or succeed but it is clear to me that within this crisis lies the opportunity to reshape the way things work. And the opportunity could only emerge this way.

It is not limited to commerce. Government too is subject to the same decentralising forces and again the replacement is better than the original. Barack Obama has run his campaign in a completely different way than anything which has gone before. This is not to say he has thrown out everything but taken new tools to turbocharge the best of what happened in the past. In a way his campaign is similar to what George Bush did in 2000 and 2004. Both men have a core of ultra committed supporters who galvanise and organise people around them into an impressive ground operation.

The new model

The right wing throws the jibe ‘community organiser in chief’ at Obama to portray him as a lightweight but it’s the reason why he will win. By embracing online fundraising Obama has tapped a new revenue source which is much cleaner and frees him from the rubber chicken circuit. In doing so he has demonstrated a new way of approaching politics and fundraising which is far better than it’s 20th century equivalent. It allows a much more direct connection with his supporters and allows them to contribute much more than just cash.

Another example I have written about before is Kiva. The 20th century model of aid is state to state which has all the drawbacks of bureaucracy at the donor end coupled with corruption at the recipient end. By contrast Kiva makes a direct connection, individual to individual, and as such is far better way of distributing funds. The individual lending the money also acts as assessor of the project and the individual receiving the money approaches them as an equal without having their sense of independence taken away. Aid is good in some short term circumstances but long term, enterprise is the only sustainable model.

What needs to happen is for these experiments to be extended to the Western financial system. In one sense it means going forward to the new model but in another going back to a past in which credit unions and building societies made loans. Regulation will have to change to facilitate these new models. It can be lighter because instead of relying on the state for oversight, just like Kiva, we can rely on the small lender. If the current crisis allows smaller, nimbler lending to take hold and provide real competition to these large institutions which go gambling then hold a gun to the taxpayers head when things go wrong it will be a great thing. As always the best opportunity lies amidst the crisis.

Pic: Julian Bleecker

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On bloggers

I am a late convert to blogging having started this May. I first started to notice blogs in 2003 and I had a rather sniffy attitude, thinking that MSM would always be better quality. I was wrong. Now blogs are some of my most frequent sources of news and alternative comment, not only that the newspapers and magazines I prefer are the ones which have best embraced the blogger spirit like the Guardian and Economist.

Blogging software is, like Kiva and OLPC, one of those technological innovations which truly can change the world. These platforms give ordinary people a voice without having to jump through hoops. Blogging is especially important in those countries which don’t have a free press, one of the pillars of democracy. The 2008 World Information Access report has just come out, the BBC reports:

“More than half of all the arrests since 2003 have been made in China, Egypt and Iran, said the report.”

“Arrested bloggers exposed corruption in government, abuse of human rights or suppression of protests. They criticised public policies and took political figures to task.”

“Jail time followed arrest for many bloggers, said the report, which found that the average prison sentence for blogging was 15 months. The longest sentence found by the WIA was eight years.”

I remember reading that the fax machine heralded the end of the Soviet Union as new technology meant that control over information passed from the state to the individual. It is happening again now and this time it is the Internet and blogs which are people’s chosen tools. The bravery of the individuals who seize them in undemocratic societies and risk jail is impressive. These bloggers are an inspiration to us in the West who take our freedom of speech for granted. Maybe future democratic constitutions across the world will enshrine the freedom of the blog alongside freedom of the press.

Read more:
On changing the world
On blogging

Pic: World Information Access 2008

On changing the world

A lot of start-ups talk about changing the world but Kiva is actually doing it. I haven’t seen a huge amount of coverage in the technology press, I guess because they will never have a billion dollar exit. Kiva will do far better than that.

The Kiva website brings together a number of different microfinance lenders and packages it up in a way easy enough for lazy, Internet addled people like me. I first became aware of microfinance when my mum started lending through shared interest years ago. I finally became a member of Kiva last month and I recently received my first loan repayments. No interest is charged and a voluntary 5% donation is suggested to cover the running costs of the Kiva office. When your loans are repaid you can loan the capital to other entrepreneurs. I am now officially a venture capitalist – take that Mr Adelson.

Before microfinance the only interaction between between western citizens and others around the world was government to government or through charity. I believe in both of those methods but what I love about microfinance is that it makes a direct connection between individuals and that by lending you are encouraging the type of enterprising people who are the key to real development. Ultimately it is trade, not aid which will end poverty and we in the West have a long way to go in abolishing destructive subsidies and tariffs. But it is no reason not to start and microfinance gives us as individuals the chance to do something now rather than wait for our governments or the WTO to do something.

I know from my own family in Somalia that there are many incredibly capable and enterprising people in the developing world who deal with far more and do far more than I ever will. Kiva gives us the opportunity to support them so what are you waiting for? Sign up now and start supporting the people who really are changing the world.

On apples and berries

This week Research in Motion announced the Blackberry Bold. I don’t really care too much about the specs, I assume smartphones pretty much do the same thing on top of the basics – email, music, photos, web browsing etc. The two things which count the most for me are design and battery life. I don’t know anything about its battery but this thing looks good:

The early Blackberries did not. I’m sure they functioned perfectly well but it is clear nobody really cared what they looked like. And in the early days it didn’t matter as Blackberries were the only show in town when it came to portable email. More genrally mobile device design has been absolutely shocking. Motorola phones looked ok but the UI is awful, at least it was when I had one and I never went back. Nokia are getting better but still put out some terrible looking devices like the E61 and Prism range.

There is one simple reason for the recent focus on better mobile design: Apple. Jobs-era products are always beautiful and when Apple entered the market they set an exceptionally high standard with the iPhone. People can harp on the lack of 3G which is a dealbreaker for most people in Europe. I would never buy a non-3G smartphone, in fact I doubt whether a smartphone lacking 3G can be described as such but this is a temporary problem. In his keynote announcing the original iPhone Jobs said the stumbling block with 3G was battery life and once they had sorted that out the iPhone would have 3G.

RIM had already started tidying up their act in anticipation of Apple’s entry with the Pearl and Curve. With the Bold they have opted to stick with the keyboard which is the Blackberry’s main distinguishing feature. I think this is a good call, RIM have managed to evolve the design of the Blackberry in a way which has struck a good balance between capturing the sleekness of an iPhone in a device which is still recognisably a Blackberry. If they had gone the whole way to a iPhone style touchscreen they would have lost. When you start to play your opponent’s game you are dead because you can never be the original. A Blackberry without a dinky keyboard is not a Blackberry. The name itself comes from the way the keys make the device look which underlines the importance of design.

Everything flows from good design. The reason facebook is better than MySpace is that it has far superior design. Pages on facebook are clean and uniform whereas MySpace is an eye popping mess. Facebook has deteriorated with the proliferation of external apps leading to attempts by the company to simplify things again. I don’t think there is much mileage in being ‘the new facebook’ but it would be inetresting to see what would happened if someone launched a new social network with a simple design and minimal features.

On our statup we hired a designer before even a developer. When the developers did come on board I emphasised the importance of our design. I wanted it to be stark and different as I think there is no value looking similar to every other website, in startups if you are not radical you are dead. Why would anyone switch to something that is 5% better than the incumbent? Design is not all of this but it is part of it.

The Modernism exhibition at the V&A had a big influence on me, in particular the work of Ladislav Sutnar. When I wrote the design spec for our site it was Sutnar’s influence that I emphasised, in particular the simple shapes and the almost monochrome, sixties look – the banner for this blog is a Sutnar design. The V&A summed up Modernist philosophy as:

Modernists had a utopian desire to create a better world. They believed in technology as the key means to achieve social improvement and in the machine as a symbol of that aspiration. All of these principles were frequently combined with social and political beliefs (largely left-leaning) which held that design and art could, and should, transform society.

I am struck by the paralells between Modernism and web startups. I recognise the tendency of startup founders to proclaim their companies as changing the world. This is rarely true on an individual company level but together we are all part of the patchwork of ideas which make up the web and put together the impact is undeniable both in commerce and beyond.

Barack Obama is rasing more small donations than any other candidate in history to the extent that this is now his main source of funding. This is a far better way than reliance on large corporate donors or state funding. Another example is Kiva which has used the web to connect people in the first world directly to those in the third world. Microfinance is a much more efficent way of redistributing wealth as it makes a direct connection between people and ultimately it is trade, not aid, which will bring an end to poverty. And it is the web which is helping make it happen.