Answer Yourself! A blog by Sukhpreet Singh

A blog on personal development, entrepreneurship & change.

9th January 2009

Creative Capitalism

I always wondered whether a “business” (corporation) can be created that is driven not only to make profit but also driven to ease the world’s inequalities. “Business of business is business” but can a business’ business be to ease the world’s problems and still sustain itself as a profitable business? I recently came across this speech by Bill Gates on World Economic Forum in Davos last January. In his speech, Gates said that many of the world’s biggest problems cannot be fixed by philanthropy, but instead require free-market capitalism—”creative capitalism”—to solve. According to Gates, creative capitalism is “an approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world’s inequities.”

Overall what I gather from his speech is that : You cannot create a profit driven corporation that is in the business of just easing the world’s inequalities. But a profit driven corporation can become a socially responsible corporation by generating ideas and processes within their realm of expertise to solve world’s problems. For example:

  • A drug company can become creative to provide affordable medicine for most common ailments like malaria, cholera etc. in poorest nations like Sudan, Somalia etc.
  • A software/hardware company generate ideas to provide affordable laptops to kids in poor nation ($100 laptop)
  • Soft-drink company generate ideas to provide technology to supply drinkable water to remote areas.
  • A bank generate ideas to provide loans to people who can’t provide collateral (poorest of the poor) and give them an opportunity to succeed.

A perfect example of a business where the line between the purpose of the business (to make profit) and social responsibility of the business is very narrow, is: Grameen Bank. Muhammad Yunus – a Bangladeshi banker, economist and founder of Grameen Bank, jointly won (with Grameen Bank) the Nobel Peace Prize, “for their efforts to create economic and social development from below. Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty. “[Ref. 1] Now thats some serious “creative capitalism”!!

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posted in change, entrepreneurship |
2nd January 2009

I wanna sell 10 butterfly larvae for $30. Will you buy them?

“Make it simple. Make it memorable. Make it inviting to look at. Make it fun …” – Leo Burnett.

As kid, I use to bring home caterpillars all the time, feed ‘em and turn ‘em into butterflies. I could never imagine that this fun-filled activityButterfly pavilion could be turned into a business. But a California based company called Insect Lore has been running a successful business doing that since past 30 years. Their product – Live Butterfly Pavilion – sells for $30. It comes with a see-through mesh, 6-10 Painted Lady butterfly larvae with special food and complete instructions to raise the larvae. They have made the product inviting to look at, fun and educational to use and leaves lasting memories. They are not in the business of selling insects, they are in the business of selling experience to the right age group. Now that’s entrepreneurship.

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9th October 2007

How much would you pay for a free music album?

In my previous post, i had discussed about how would you compete with free. Here is a perfect example of a music bandcheckoutscreen-radiohead.jpg that found a way to add more value to its listeners and let each listener (or fan) decide how much they want to pay for that “value”.

Recently, Radiohead announced that they will let anyone download their latest album – “In Rainbows” from their websiteitsuptoyou.jpg for any price the listener decides to pay. Is that cool or what? In traditional setup, musicians have never made money on record sales. Most of it went to the labels. So artists like Radiohead and Prince, who gave away his newest album (3121) for free inside of a newspaper, are at the front of new wave.

What are the benefits of this new model?

1) Its easy to distribute music and so low overhead costs.
2) Band gets to keep more and more profit.
3) Its easy for fans to download music. They will prefer to download the album from original source rather than some unreliable peer-to-peer network.
4) By giving the choice of having their music for free, bands would generate good will for themselves.
5) All in all there is no loss for a band to go for this model.

Its interesting to point out that an artist only makes about $1.25 USD per each $16.98 retail album and record companies receive approximately $10.00 from that CD. I’m sure many will opt to pay at least $1 and loyal fans would pay more for the album. It’s possible that Radiohead will make more money selling “In Rainbows” directly to consumers than they would have otherwise.

The new model that Radiohead has chosen is great for everyone except for Label Industry. By embracing this model the best band in the world is telling Label Industry “We don’t really need you and we are going on our own.”

I am not a big fan of Radiohead, but just to checkout their new album, I’ll pay about $3 for their album. I am a big fan of Bob Dylan and so if he does something similar, I would not mind paying $8-10 for an entire album.

How much would you pay for a downloadable album from your favourite band?

  • $3 to $5 (40%, 2 Votes)
  • $5 to $10 (40%, 2 Votes)
  • more than $10 (20%, 1 Votes)
  • less than equal to $1 (<=$1) (0%, 0 Votes)
  • $1 to $3 (0%, 0 Votes)

Total Voters: 5

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posted in entrepreneurship |
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