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The Effect of Social Missions On Tech Innovation

The New York Times is running a piece on how some emerging companies in the tech industry are focusing on social missions rather than profits despite having successful business methods. The startups are modeling themselves after organizations like Mozilla and TechSoup, who have both grown to significantly affect their respective markets. The article also discusses some of the non-profit support groups, such as the EFF, who contribute specific services to the field. Quoting: "'There is a lot of discussion taking place right now about a whole new organization form around social enterprise,' said James Fruchterman, president of Benetech, a social enterprise incubator based in Palo Alto. 'Many of these efforts can make money; they will just never make enough to provide venture capital rates of return.' The new stream of technology-centric and successful nonprofits, however, appears to be driven in part by a set of microelectronics technology trends that have sent shock waves through many industries, from publishing to music and movies. 'Computer technology and the Internet are lowering the cost of doing business,' said John Lilly, the chief executive of Mozilla."

8 of 50 comments (clear)

  1. Finally... by ZerothOfTheLaw · · Score: 3, Interesting

    My business partner and I have been talking about stuff exactly like this, but I never knew companies were actually doing this. It always seemed a major problem that companies must be devoted to profit... and that leads to issues, like Microsoft changing their billing practices, etc. When a company is the undisputed leader in their niche, they had to do something to increase their profits. Usually thats when companies do stupid things like use the RIAA, put spyware on CDs, etc. So its actually bad for a company to focus on profits. Oh well, still too many greedy people.

    1. Re:Finally... by vertinox · · Score: 4, Informative

      It always seemed a major problem that companies must be devoted to profit... and that leads to issues

      I remember a press release somewhere about a non-profit pharmaceutical company created specially because of the issues you refer to. Ah here it is... http://www.oneworldhealth.org/

      Anyways, some type of issues that the world deals with doesn't fit well with the corporate business model. Just because a profit cannot be made, doesn't mean it shouldn't be done.

      --
      "I am the king of the Romans, and am superior to rules of grammar!"
      -Sigismund, Holy Roman Emperor (1368-1437)
    2. Re:Finally... by ZerothOfTheLaw · · Score: 3, Insightful

      Gee... perhaps thats the problem? Check this out: We need a new path to liquidity

    3. Re:Finally... by swillden · · Score: 4, Informative

      So its actually bad for a company to focus on profits. ...and it can be illegal for them NOT to focus on profits, if they're publically trading.

      Not necessarily. Corporations must focus on providing value to shareholders. For most (i.e. almost all) companies, that means profit, though any and all legal means. But it really depends on what the articles of incorporation say.

      Whenever you create a corporation, you file a legal document called the articles of incorporation that set up all of the rules about how your company works and what its goals are. The boilerplate articles that most companies use say that the company's goal is, basically, profit. When shareholders buy into such a profit-seeking company, they have a legally-enforceable expectation that the board and officers will focus their efforts on making money.

      Some companies, however, write different articles. There are a number of companies in the last few years who have written environmental responsibility into their articles, and prioritized it above profit. So for those companies, shareholders expect profit to take a back seat to environmental concerns. The officers of such a company would be breaking the law if they were to, say, use cheap, non-sustainable technology to build their products in order to increase profits.

      The problem, if there is one, isn't that corporate executives MUST seek profits, it's that shareholders prefer to buy into corporations that are structured to seek profits.

      --
      Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
    4. Re:Finally... by Plunky · · Score: 3, Interesting

      The problem, if there is one, isn't that corporate executives MUST seek profits, it's that shareholders prefer to buy into corporations that are structured to seek profits.

      and that the majority of the money that comes from shareholders to buy shares is not from people, but corporations whose charter includes only profit aims.

      Such as banks.

  2. Re:The Visionary Geek by schnikies79 · · Score: 3, Insightful

    Geeks will not inherit the world anymore than any other group will.

    The world has to have different types, asshole types included. Without them and the other groups, the would does not and will never work. You need forward thinkers and you need short sighted thinkers. Without short sighted thinkers, you go bankrupt in the short term and there is no long term and visa versa.

    No one group or type of person can do it all.

    --
    Gone!
  3. The Canonical Example by swillden · · Score: 3, Informative
    From the article:

    Brewster Kahle, who has founded a number of successful Internet companies, as well as the nonprofit Internet Archive, said: âoeIf we do this right, I think there is momentum here. The next major operating systems company might be a nonprofit.â

    I wonder if he's theorizing or just making a veiled reference, because it seems to me that there's a very good chance that the next major operating systems company is Canonical Ltd., producer of the Ubuntu Linux distribution. While Canonical is technically a for-profit company, it is not a profit-motivated company. Mark Shuttleworth has said from the beginning that he was willing to continue funding the company in order to make sure that it met its social goals -- distributing a high-quality, user-friendly operating system completely free of charge.

    With low costs from its decentralized "virtual company" model, and moderate revenues, I believe Canonical has achieved profitability even sooner than Shuttleworth expected. But profit is and has been a side benefit, something that makes running the company easier rather than a primary goal.

    I'm surprised the article didn't mention Canonical by name.

    --
    Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
  4. Re:The Visionary Geek by hey! · · Score: 3, Insightful

    The world has to have different types, asshole types included.


    That's what the assholes want you to think.

    You think Enron was the only company that fudged numbers so their top brass made their bonuses? This behavior doesn't create wealth, it only redirects it from productive uses. These people are parasites on wealth building processes. The system functions despite these people.

    The essence of being an asshole is being a person who habitually lies to get ahead. Many highly successful people are assholes, but for ever such there are a thousand whose lies caught up with them. It isn't that assholes aren't forward thinkers, it's that they don't look any farther into the future than is necessary to keep their deceptions from collapsing. It's not about rational self interest, it's about the inability to control the impulse to grasp and manipulate.

    This doesn't mean nice guys finish first. The world isn't divided into assholes and nice guys. Ben Franklin was a bit of a conceited jerk, but he was never an asshole, and he pretty much accomplished anything he ever set his hand to. He was incredibly disciplined; it was always a penny saved with old Ben. He know the line between jerk and asshole, and didn't step over. He wasn't the type to cheat a customer because a repeat customer, after all, is the most profitable in the long term. He might deceive his way into a lady's boudoir, but his aims in those matters were exclusively short term.

    And sometimes assholes smarten up. Young George Washington was a nasty piece of work, but the transparent ugliness of his social climbing ruined any prospects he had of advancement, and this changed his thinking.

    Thomas Jefferson never stopped being an asshole, and suffered his entire life as a result. No question he was very bright, of course, but what he accomplished was because of his intelligence and despite his unwillingness to face his personal problems squarely.

    The world needs many kinds of people: kindly people and stern people, benevolent people and ambitious ones. But saying it needs assholes is just another way of saying that it needs more fools. Saying that many assholes are successful is like saying that many people successfully pursue the lottery to riches. It's only "many" if you don't compare it to the failures.
    --
    Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.