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Old Concept Paper
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I haven't written to this blog in quite a while. The reason is that I am going through a lot of stuff that probably is best left off the blog. Thus, I am going to go back in time and post a concept paper I sent around in March 2004 which turned into Kiva. I sent this out to anyone that would read it and got mixed responses.
A lot has changed since the time I wrote this paper. In general, the biggest difference is that Kiva is now starting to rely on a network of existing partners in the field to do work there, instead of hiring our own staff in the field. Another big difference is that we are implementing a "rating" system whereby these partner's reputations are tracked on our site. The last difference is that we decided to frame the experience as "lending" rather than "investing". In reality, Kiva doesn't offer equity investments, it offers loan opportunities. This is a fine, but important, line.
Sorry for my lack of activity. I will probably not be able to blog about the daily activities of Kiva for a while.
Thanks,
Matt
-------------------------
Business/NGO Idea
Matthew Flannery
March 7, 2004
Introduction
-------
The following is an idea for an international
organization/company which seeks to connect
small US investors with small scale business
proposals in third world rural areas.
This organization is very similar to the Village
Enterprise Fund (www.villageEF.org) with a few
key differences. 1) It seeks to use technology
(internet) as a way to connect investors directly
with businesses and 2) It offers the possibility
that investors receive a return on their
investment.
Summary
-------
The average first-world citizen has the financial
leverage to start a real business in the third
world. The problem is connecting average first-
world investors with third-world entrepreneurs.
I propose an organization/company which serves to
connect these two worlds in an innovative way.
Website
-------
The website contains a browsable gallery where
potential investors can find a number of business
proposals. Along with pictures, these business
proposals come in a standardized format and
only those matching a certain standard of
quality get listed on the site. Each posted
business plan is evaluated by the staff
in terms of its likelihood for success and the
integrity of its claims.
Each business plan specifies the amount of
investment needed to get running. It's possible
that the investment could actually be given
out in rounds. In this scenario, the business
would have to fulfill certain requirements in
order to qualify for each sequential round of
funding.
Staff
-------
This idea is not like many internet business
ideas which claim to "run themself". This is
a rather labor intensive business that would need
significant staff.
In particular, the staff of this organization
would need to include the following.
--IT experts.
--Software/Web developers
--Accountants/Auditors
--Field agents who visit and record
data in rural areas
--Marketing staff
Integrity and Transparency
-------
The organization places a high value on integrity
and transparency. As globalization spreads,
third world countries can often get left behind
because their business world lacks integrity
and transparency. This organization seeks to
make these areas more valid candidates for
investment by bringing first world transparency
and integrity to the third-world.
Specifically, this means the following. 1) the
business proposals are as detailed and legitimate
as one can possibly guarantee. 2) All investments
go to purchase exactly what is listed and nothing
more. 3) Businesses are encouraged to achieve
or lose out on receiving future investments. We
are all about getting a return on investment.
Those businesses which are able to make consistent
returns will receive the most favorable treatment
by the organization and investors looking to compare
them.
Technology
-------
A large portion of the third world is just
recently coming into the mass deployment of
technology which makes this idea worth
discussion. The most notable of such
technology is the wireless internet which
is now becoming accessible from practically
anywhere.
The staff of the organization would be equipped
with a small number of wireless devices which
make the following possible from a rural location.
1) Taking a picture 2) Writing text into a word
processor and 3) Transmitting files wirelessly
over the internet.
Purpose
-------
The purpose of the organization is to help people
living in rural third-world conditions escape the
cycle of poverty. It has been demonstrated by VEF
that a good way to do that is to aid in the creation
of businesses. The idea behind this organization
is that, if ROI is proposed, people will be more
attracted to the idea of putting money into these
regions. Also, the benefit of cutting edge
technology is that it connects people more closely
than ever previously possible. You can imagine
a sense of "instant gratification" when placing
an investment in a small business overseas and
seeing in a matter of hours the impact your
investment is having on the recipient.
A lot has changed since the time I wrote this paper. In general, the biggest difference is that Kiva is now starting to rely on a network of existing partners in the field to do work there, instead of hiring our own staff in the field. Another big difference is that we are implementing a "rating" system whereby these partner's reputations are tracked on our site. The last difference is that we decided to frame the experience as "lending" rather than "investing". In reality, Kiva doesn't offer equity investments, it offers loan opportunities. This is a fine, but important, line.
Sorry for my lack of activity. I will probably not be able to blog about the daily activities of Kiva for a while.
Thanks,
Matt
-------------------------
Business/NGO Idea
Matthew Flannery
March 7, 2004
Introduction
-------
The following is an idea for an international
organization/company which seeks to connect
small US investors with small scale business
proposals in third world rural areas.
This organization is very similar to the Village
Enterprise Fund (www.villageEF.org) with a few
key differences. 1) It seeks to use technology
(internet) as a way to connect investors directly
with businesses and 2) It offers the possibility
that investors receive a return on their
investment.
Summary
-------
The average first-world citizen has the financial
leverage to start a real business in the third
world. The problem is connecting average first-
world investors with third-world entrepreneurs.
I propose an organization/company which serves to
connect these two worlds in an innovative way.
Website
-------
The website contains a browsable gallery where
potential investors can find a number of business
proposals. Along with pictures, these business
proposals come in a standardized format and
only those matching a certain standard of
quality get listed on the site. Each posted
business plan is evaluated by the staff
in terms of its likelihood for success and the
integrity of its claims.
Each business plan specifies the amount of
investment needed to get running. It's possible
that the investment could actually be given
out in rounds. In this scenario, the business
would have to fulfill certain requirements in
order to qualify for each sequential round of
funding.
Staff
-------
This idea is not like many internet business
ideas which claim to "run themself". This is
a rather labor intensive business that would need
significant staff.
In particular, the staff of this organization
would need to include the following.
--IT experts.
--Software/Web developers
--Accountants/Auditors
--Field agents who visit and record
data in rural areas
--Marketing staff
Integrity and Transparency
-------
The organization places a high value on integrity
and transparency. As globalization spreads,
third world countries can often get left behind
because their business world lacks integrity
and transparency. This organization seeks to
make these areas more valid candidates for
investment by bringing first world transparency
and integrity to the third-world.
Specifically, this means the following. 1) the
business proposals are as detailed and legitimate
as one can possibly guarantee. 2) All investments
go to purchase exactly what is listed and nothing
more. 3) Businesses are encouraged to achieve
or lose out on receiving future investments. We
are all about getting a return on investment.
Those businesses which are able to make consistent
returns will receive the most favorable treatment
by the organization and investors looking to compare
them.
Technology
-------
A large portion of the third world is just
recently coming into the mass deployment of
technology which makes this idea worth
discussion. The most notable of such
technology is the wireless internet which
is now becoming accessible from practically
anywhere.
The staff of the organization would be equipped
with a small number of wireless devices which
make the following possible from a rural location.
1) Taking a picture 2) Writing text into a word
processor and 3) Transmitting files wirelessly
over the internet.
Purpose
-------
The purpose of the organization is to help people
living in rural third-world conditions escape the
cycle of poverty. It has been demonstrated by VEF
that a good way to do that is to aid in the creation
of businesses. The idea behind this organization
is that, if ROI is proposed, people will be more
attracted to the idea of putting money into these
regions. Also, the benefit of cutting edge
technology is that it connects people more closely
than ever previously possible. You can imagine
a sense of "instant gratification" when placing
an investment in a small business overseas and
seeing in a matter of hours the impact your
investment is having on the recipient.
