It’s Time to Build … with Impact
Marc Andreessen — the co-founder of Netscape and Silicon Valley venture capital firm Andreessen Horowitz — wrote an essay “It’s Time To Build” that has stuck with me for sometime. The gist of the article was the best institutions across the world not only had a failure of imagination and foresight of all the problems that were bound to happen, but also that these institutions were so chilled, complacent or grown comfortable and inert to the point that there was no more drive, design to want to get things done anymore. Without that dream and desire for change, there was no advance preparation, nor are we even close to catching up to the economical, ecological, and biological destruction of our world. And in Marc’s word, our collective failure of action, can be pinpoint to our widespread inability to *build*.
But the trillion dollar question is: What are we to build? If we look to Thailand as an example, more masks factories, government handouts and vaccines will help, but it will deal with the current Covid-19 crisis, but not the next one. Print more money and plow it into infrastructure spending and government pet projects, only to buy submarines, create high-speed trains and airports that people won’t have much use of or have those money diverted to prop up the stock exchange and into coffers of politicians?
Rather than look at the talking heads on TV for the answers to our questions, I have an unpopular idea: Let’s look to what Gen Z and Gen Alpha are doing and building. Globally connected and highly conscious of social and environmental issues, Generation Z (which are individuals born in the mid 1990s and the first decade of 2000s — are coming of age in an era rife with social, technological, and environmental turmoil. The jobs and theories they were studying in school no longer prepares them for a job market that literally no longer exists. Their government no longer seem to know, understand and are able to communicate and respond to their economic plight and the broken social contract. They are fatalistic in their views as the final generation of mankind that will be most likely wiped out into extinction by climate change, thanks to the pussyfooting and half-hearted responses by the previous generation. But before you count them out, watch and learn from this generation because they are no longer waiting for their governments, global leaders like US or China or “experts” and benevolent “corporations” or “philanthropists” to solve the world’s problems. Because by 2020, they now represent 40% of global consumers according to McKinsey & Co. and by 2030, they will be 960 million people strong just in Asia. And they are already showing us all how they will be building a better world for their generation based on 4 key pillars: Activism, Education, Innovation and Authenticity.
Building Consumer Activism and Social Movements
More than any other generation that came before, Gen Z are more prepared to vote with their wallets for brands that genuinely support and promote causes about social impact such as climate change, DIBs (Diversity, Inclusion and Belonging) such as LGBTQ+, racial and social justice issues like Black Lives Matter, #MeToo. And if companies want Gen Z and Gen Alpha as their customers and employees, there’s no other strategy to pursue other than “Impact.” Whether you will prove and measure it by ESG or the UNDP’s Sustainable Development Goals, companies have to prove their environmental, social and governance credentials more than ever before to even relevant. If organizations treat sustainability and ESG as a CSR or a fad, Gen Z have an incredible bullshit meter and tons of literacy and information on social and environmental issues their disposal, and they will not be forgiving to company. Not only will they call you out publicly, but their hyper-connectedness means that they can quickly organize their generation to turn against a brand through Tweetstorms and live feeds. The challenge is no longer about trying to contain the discourse, to buy off journalists, traditional media and PR people which Gen Z no longer trust.
Brands have to align with their consumers attitudes and expectations, because while Covid-19 may have decimated Gen Z’s careers and income, they are a force to be reckoned with. Some notable stats to prove their power:
- In 2018, total direct spending by Gen-Z consumers were $2.4 Trillion according to OC&C.
- 70% of Gen Zs have influence over how their family spends money according to IBM
- 52% of Gen Z in Asia try to have a positive impact on the environment through their every actions according to Euromonitor
Asian brands are a laggard to sustainability compared to the U.S. and European companies: only 8 Asia-Pacific companies out of 263 globally studied by Nikkei reached the Top 50 ranking on ROESG scores (calculated by multiplying the company’s return on equity percentage number with an ESG score). 80% of the top 100 companies are Western. That means for many aspiring entrepreneurs, the opportunity to create an Asian and sustainability focused venture is still a blue ocean. But that opportunity would never be realized if we do not build on my 2nd pillar: Education
Build Impact with Education
It’s no secret that great businesses, brands, and technology are built by smart people. So the business of investing in people, whether it is by providing proper nutrition, quality health care, education and skills help build human capital. I think we all unanimously agree that improving the quality of everyone in our community will lead to higher quality of life for all of us, less crime, less social unrest, and drive sustainable and inclusive economic growth. Yet why is it that a child born in Southeast Asia will only achieve 59% of their potential productivity when he or she grows up?
According to the World Bank, here’s some shocking stats:
While equal access to basic services has taken a hit during Covid-19, there are many areas where innovation is coming in to level the playing field. Online education has taken off and disrupting the exorbitantly overpriced Higher Ed industry (Read my post on: Post Corona: Online Higher Ed is The Way), Telehealth and telemedicine (including online mental health services like Ooca in Thailand) is serving those affected by Covid-19 and making mental health less of a taboo and how SATI Foundation and Social Giver is using crowdfunding, data and social media tools to provide the most vulnerable communities in Bangkok with basic hygiene and nutrition to survive the pandemic. The list goes on an on.
That said, if there is one area of bright spot during Covid-19, it is self-evident to everyone now that digitalization of the workforce and companies is not just inevitable, but must be accelerated to meet the needs of these uncertain times. And if you follow the lead once again of young people, the stats speak for itself: Even though youths will not get the proper education, healthcare and nutrition they deserve, ASEAN Youth Bullish about Impact of Technology on Jobs according to the World Economic Forum Youth Survey, gathered responses from 64,000 ASEAN citizens through users of Garena and Shopee.
Key findings from the report include:
- ASEAN youth is highly optimistic about the likely impact of technology on their jobs and income.
- Some 52% of the under-35 generation across South-East Asia said they believe that technology will increase the number of jobs available, while 67% said they believe that technology will increase their ability to earn higher incomes.
- The degree of optimism about the impact of technology on the future of work varied strongly by country. The youth of Singapore and Thailand were much more pessimistic in their responses, while the youth of Indonesia and the Philippines were much more optimistic.
- A significant portion of youths (one in four) aspire to work for themselves and start their own business. However, many working for SMEs said that they would like to work for a different organization.
- ASEAN youths spend on average 6 hours and 4 minutes per day online, with 61% of that time spent on leisure, and 39% on work.
Why does this report matter? Besides identifying a generational challenge on food, health care and education for all that should be met with new solutions and businesses models, Gen Z are telling us in Southeast Asia (and I dare say across the rest of the world) that despite facing with the largest economic and health crisis of a century, they are choosing to have self-agency and take life into their own hands by starting their own businesses, especially digital ones. They are going to build businesses for the next gen consumer and it is heartening to see that almost 10% of them would want to work for a social enterprise or non-profit!
But building businesses along will not solve the world’s problems: we need to train and mentor Gen Z to be able to realize their potential and redirect their entrepreneurial energy to impact ventures. (Trust me, I built my coworking space HUBBA and media company Techsauce by hyping up startups and unicorns for the past decade. We made some good businesses, but we are nowhere nearer in our mission to solve the world’s problems. The world needs more ventures that make both money and meaning, not more billionaires.)
Building Impact with Innovation
In my previous post on “How to Give Back to Our World”, I made the case on why personally, like what most Gen Z believes, is that we are the first generation to face with a possibility on an extinction of our entire species. No longer just on top of the food chain, labelling millions of anonymous tigers, sharks and insects as endangered or extinct without feeling any remorse, we now realize more than ever that what we do with our world are interconnected to the rest of humanity. So when consumers from the UK decide to cancel Thailand’s coconut picking culture using monkey, the generational culture clash has never been more clearer. Older Thais in general don’t care about this or dare to say much, but Gen Z from across the world have begun demanding supermarkets in many parts of the world to take our coconut products of the shelf. The impact has been fast and furious, and having talked to many ministers, business leaders and government officials, it is clear that they are not ready to lead in these uncertain times because they cannot keep up with technology and innovation (heck, even as a technologist at the heart of the Thai startup community, I can barely keep pace with innovations in my own backyard).
So rather than fight one another over which generation is better to lead the world out of this crisis, why not have Boomers, Gen X, Millennials and Gen Z work together? Since every innovation is so new and changes so fast, nobody has an edge or monopoly on tech or great ideas anymore. If there’s one thing I can recommend corporations and governments to do more, it is to listen to Gen Z on what are the problems, ideate with them on possible solutions that are 10X better and support them with capacity building, funding, technical and business mentorship and access to customers. There is no way for any experts or business gurus to know all the problems and challenges within every community and industry, and the era of building public policies from a top down approach is at best a waste of time, at worst it should be considered a crime of incompetence that will set our societies on a ruinous path of inertia.
That is what we believe it at Impact Collective, a community-driven acceleration program for startups focusing on opportunities in Asia. We’re going to be investing, supporting, and connecting startups that are solving global challenges to accelerate the positive impact in the world and we are doing that with the support of incredible of private and civil sector organizations. We saw that the world was going to hell in a hand basket, and we believed that we couldn’t wait any longer. We knew great entrepreneurs and impact makers were across Asia, but they were not getting the love and support they needed to scale unlike their hyped up peers in the tech world. We believe that we might not be an expert in every emerging technology or market, but through wisdom of the crowd and leveraging our regional partners and experts, we can uncover the hidden gems of our regional ecosystem and help be a catalyst for accelerated growth. The reason I bring this example up is simple: this idea was created during Covid-19, by old friends who met at a coworking space 7 years ago and launched completely virtually across Asia in 3 months. It the past, launch an accelerator this way would be blasphemous to the traditional brick and mortar, let’s-all-sit-in-a-coworking-space-together-and-drink-the-koolaid accelerator model. In the Covid-19 world, neccessity is the mother of all inventions and new business model are emerging.
What does this mean to Gen Z and allies? For entrepreneurs of Generation Z, this is the chance that we have all been waiting for in the social enterprise space: making impact ventures mainstream and the norm, not the exception, of how to do business and we will rely on you to help support existing and new impact makers, many of whom are your peers, to launch and scale from this recession. (if the last recession made Uber and Airbnb, what would this depression’s world changing tech company be besides Tik Tok?). For corporations and investors allies, this is the best time to invest in impact ventures: accelerating consumer demand for sustainable businesses, more young entrepreneurs hungry to serve the next gen consumers, and new innovation models and supporting mechanisms that never existed before.
Build with Authenticity
The more Gen Z consumers enter the workforce, the faster the shift towards ethical consumption will happen. To whitewash and greenwash business-as-usual will no longer suffice, companies can’t go through digital transformation without transforming their mission, vision and values. Why does a business exist besides to enrich shareholders and exploit resources? Without an aspirational purpose that is not generic, unauthentic and a standard that is constantly being met and set higher, the back-firing can be brutal. This is why impact ventures have an edge over incumbents that have to deal with legacy culture and norms, boards and shareholders resistant and ignorant to the changing world, inertia and political turf wars in the massive organizational hierarchy. New startups can show of the process of how they are making the product, talk directly to consumers, respond to customer complaints and tweetstorms in real time, and share their stories, warts and all, more authentically from day 1 than any mega-corporation can ever hope to do. Gen Z are already sharing their stories and desires on the streets with Climate Strikes, Extinction Rebellion and Black Lives Matter. Now is the time to harness those energies to both take on governments and society, but also the business sector too with innovation and impact. So put down your phone, and stop reading this post and go out there to build some sustainable, ethical and impactful ventures and let’s not make our extinction inevitable.
Last thoughts on Collective Effort
I was once told by a community building OG that “It takes a village to build a startup” and it has stuck with me ever since. That still rings true today but the definition of our village, our tribe for Gen Z is not just limited to peopl in your neighborhood or country but the whole of humanity. That is why I’m super excited to be ASEAN Director of IMPACT COLLECTIVE which is pioneering a community-driven investment model (democratized capital allocation) to support high impact ventures in Asia, because as a region we have never been more connected and faced with similar challenges thann ever. I’m impressed by the vision and the why of the founder, Changseong Ho, and the team’s strong focus on impact measurement and unique approach in harnessing the power of collective intelligence across diverse experts to enhance diversity and quality of startups scaling in the region is a breath of fresh air in the stale business model of accelerators and if we succeed, we hope to scale our presence to all major innovation hubs in Asia and to be the blueprint (or greenprint) for future ecosystem supporters to learn and copy/innovate upon.
Right now, my team and I are seeking the most promising startups interested in scaling in Asia to be part of the unique equity-free acceleration program and access $100–500k investment. On top of the access to our fund and investors in our network, my team and I will help each ventures build up your connections to city via Citypreneurs and regional anchors in 4 cities in Asia: Seoul, South Korea | HCMC, Vietnam | Singapore | Bangkok, Thailand that will help to explore expansion opportunities and offer pilot projects in the region.
If you are interested or know any startup based in Asia or those looking to grow and expand here that could benefit from Impact Collective, please help me spread the word. Please let me know if you have questions and I look forward to seeing some of you in our inaugural cohort 😇
Applications close 5th Sept — Apply now!
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