Profits and Social Responsibility

The relationship between profits and social responsibility is a topic I’ve touched on many times here over the years.

I believe you can be a socially responsible person, investor, or company and also be a high performing one.

I tweeted this yesterday on the news that our friend Shri has launched a new venture capital firm called Spero:

I do believe you can be an impact investor and produce top tier returns.

And then later yesterday, I came across this interview with Josh Silverman, the CEO of Etsy, where I am Chairman, and I love this comment:

The best of Etsy has always been our commitment to social responsibility. It was our execution that was letting us down. And I think we were at risk of confusing those two. So, we continue to hold to our commitment to the broader community. But when you’re a socially responsible company, you’ve got to hold yourself to a higher bar on execution. We’ve defined three areas in particular where we believe we’re especially well positioned to have impact on our community: economic empowerment [for sellers], diversity [of our workforce] and environmental impact.

I agree with Josh that you can do both, but when you are committed to doing both, you have to hold yourself to a higher bar on execution because any mis-steps will be viewed as the cost of the double bottom line. And that is unfortunate.

#life lessons

Comments (Archived):

  1. JLM

    .There are a multitude of good causes which merit our consideration and support.The big question is whose money should be used to fund them?Count me amongst the crowd that personal interests should be funded with personal funds, not shareholder money.ETSY is a perfect example.The new CEO comes on board and strips away 50+ programs which do not directly contribute to the bottom line. They either get dumped or jettison B Corp status.The stock moves up nicely.I do not want to put Freddie in a position to reveal material non-public info as he is Chairman and ETSY is public, so I will stop there.Make a lot of profit. Do good. Do good with your own money, not the shareholders’ money.Full disclosure: long ETSY since the new CEO was named. Up 30% +.JLMwww.themusingsofthebigredca…

    1. LE

      What is your opinion of the NY State Pension fund announcing the following:http://www.rocklandtimes.co…New York State Comptroller Thomas P. DiNapoli on Wednesday announced that the New York State Common Retirement Fund (the Fund) plans to vote against all board directors standing for re-election at companies that have no women on their boards.

      1. Adam Sher

        NY State is one of the best funded pensions in the US so I’d look to them as an example of how to run a pension fund.

      2. JamesHRH

        I think the NYSC should read the studies that show that female inclusion @ the BoD level has no impact on performance.Its superficial diversity – the women think like their male corporate counterparts, when it comes to business. That is what the studies show.

        1. @mikeriddell62

          But these studies are all in the past. You can feel the winds of change though surely?

          1. JamesHRH

            Dude, my wife leads 3000+ operations people for the 4th largest energy company on the planet while I do a less than half assed job running our domestic scene.I am the wind.And, what I can tell you from the forefront of change is that it is BS. Women don’t want to include me in their domestic circles and I don’t begrudge them that fact. They want time with their gals ( and trust me, I’m a laugh and a half ).Most men like to socialize with men, then with mixed groups. Women are the same.Ask any retired athlete or person who has just moved to work from home – they miss the social aspects of their prior set up.Identity politics is a control mechanism, a shitty political ploy served up by people how are not winning big in the world of power, even though they have made some big dough ( media, academia). They are all ego driven, self esteem types who feel so special about themselves that they need to help other people ‘who just can not succeed at the level that I did.’Sure, people like to help people.But, you know when you have an ego monster liberal on your hands because, well, you see and hear them talking all the time.How much good has Bill Gates done in the world in the last decade?Yet, he’s managed to do so with zero outrage.Capitalism is funny. Wall St gives it a bad name, but anyone who actually owns, runs or builds a business knows that it is mostly about service to others.Service to others brings power; service to self brings a feeling of uselessness….which lead to outrage…..which is actually just directed at the wrong person.George Clooney – whose Hollywood career is near perfection, what taste – hasn’t accomplished a thing with all his political grandstanding because, on that front, he’s a feckless loser and he knows it.Respect this gal, a lot. Even if she achieves nothing – https://www.washingtontimes

          2. @mikeriddell62

            I’m also a bloke. And bloody proud of that fact.That isn’t the point though. We need (us men included) a more feminine approach to leadership.More soft-power. Less aggro.I’m done with aggro though have a wife who dishes it out (sometimes when she’s pissed off with me).Take on board all your points though brother. Let’s get this show on the road.As we say here in wigan…(England) #KeepTheFaith x

    2. @mikeriddell62

      Don’t understand why you wouldn’t want shareholder’s money to do good. What do you expect management to do with it? Bad?

      1. Richard

        return it to shareholders, invest it, lower profit margins.In the long run charitable giving is best done by individuals

        1. @mikeriddell62

          Its not about charity and def not about’s about a business investing in outcomes of value to their customers.Society wants business to clean up its act by doing more good, not more bad.

          1. Richard

            What company isn’t supporting its customers? Thats almost the definition of a free market? You are not going to fall for this BS of Facebook doing harm to its users? Good and Evil are a bit subjective, no? Easy to agree on Big Tabacco, but not everybody. Hard to reach agreement on Bitcoin, which could screw many more Americans if it every did become a world currency as Jack Dorsey allegedly said yesterday? Dollars for donuts that @CNBC, the shill comoney, mis-quoted him.

          2. @mikeriddell62

            Good and evil are so subjective these days that we need an objective way of deciding what isn’t and isn’t a good or an evil outcome.If you drink from the well you should pay for the well.Agree about Bitcoin. I reckon Satoshi is ex Goldmans and living in Manhattan! But we do need a new world currency – one that is based on credit-money not debt-money.

          3. Girish Mehta

            What is the difference between “credit-money” and “debt-money” ?

          4. @mikeriddell62

            Well debt-money is fiat money like the USD which is lent into existence as a debt on the balance sheet whereas a credit-money would be earned into existence instead (as a token that stores the value created).

          5. JamesHRH

            But many of the social programs are not of value to customers. They are of value to the founders.

          6. @mikeriddell62

            Agreed, and getting those interests aligned is a culture shift for founders and investors since it involves a shift in their business model as well. That is the challenge faced by incumbents – they’re wedded to their growth (at all costs) curve.

          7. @mikeriddell62

            Problem dat

    3. Lawrence Brass

      What do shareholders want more?Increasing valuations or regular dividends?I think that if you can push up valuations with clever spending on social responsibility, it is something good for both the community and for the shareholder.I mean real social responsibility, not marketing campaigns about social responsibility.

    4. LE

      Make a lot of profit. Do good. Do good with your own money, not the shareholders’ money.I would like to add to what you are saying (which I agree with) that not all shareholders have the same financial pot. Some shareholders might feel it’s ok to spend on public good because they have considerable resources and owning a particular stock is more entertainment than anything else. They are not depending on the dividends and might not even care that much what happens to the stock price because it might be a very tiny part of their assets. [1]It’s debatable whether a company doing social good will inevitably produce higher profits (see my comment on women on boards). That issue is not settled. I am sure either side can dig up data to support their position. In a way it reminds me of observant orthodox jews who insist that observing shabbos does not impact business. ‘The higher bar’. And they are always able to point to success stories (such as B&H Photo as only one example) that don’t do business from sundown to sundown but have thrived.So the point is that other shareholders may not have the same resources as the financially secure investor who might support this behavior. As such it’s simply not right for others to decide and push the social issue using what they think, need and care about as the basis for what the company should do. This is really a lack of understanding of other’s financial issues. This is not putting yourself in someone else’s shoes.[1] For example I own a small amount of stock. Every day that stock goes up and goes down. Obviously the portfolio is off from when we hit the top. I loose zero sleep over it because I don’t need the money for anything. And it’s not a big part of my total financial picture. But if I was a young person and I needed to buy a house then perhaps I’d feel differently. I’d probably be losing sleep over the losses.

      1. cavepainting

        @JLM:disqus @le_on_avc:disqusI disagree with your premise that corporations should only generate profits for shareholders and all “doing good” should be at the individual level.Exhibit A: Salesforce. They pioneered the 1:1:1 model (contribute 1% of equity. 1% of time, and 1% of profits towards causes they care about) and it has had a dramatic impact both internally and externally.Salesforce CEO’s key notes at Dreamforce, their annual event, are at least 40% focused on the charity work Salesforce does and the audience loves it. Why? Shareholders, customers, and employees are humans first. They see it not just as benevolence, but something that frames their work in a larger context.There is something to be said for corporations being more than machines that generate profits. They need a soul.Integrating “doing good” into your mission is more than compensated for by its ability to improve outcomes in hiring, retention, customer acquisition, employee productivity and brand value. Yes, business impact is hard to measure and can be fuzzy, but when the mission is an authentic dimension of who the CEO or company is, it is likely to be a plus. [1][1] Of course, it is easier to do this when the company is growing fast and well capitalized. Much harder when business is stalling or bleeding.

      2. ShanaC

        My parents are orthodox in an orthodox community. My father has been an entrepreneur for most of my childhood.As a general rule, entrepreneurship is mostly seen as too risky or something you do only if you have the family financial means to start something/spin something out OR as something within the orthodox world because of the cost of yeshiva tutiton. There are exceptions, but not many. There’s also some interesting conversations about this because the economy that people used to rely on is failing, as well as the idea of what jobs are reliable is also failing within the orthodox community.Let’s put it this way, I have a friend from high school who basically became an accountant, then quit and move to LA. He’s now a paid actor (… ), specializing in voice acting (this is what he always wanted to do with his life). He became an accountant because he was told growing up he wouldn’t be able to sustain an orthodox life.

        1. LE

          My father has been an entrepreneur for most of my childhood.I can’t remember what I ate two nights ago but I do remember your father had something to do with polycom phone systems etc from a comment you made years ago!

          1. ShanaC

            he refurbishes them

    5. Salt Shaker

      There are many successful companies with a stated biz objective of social responsibility. Top of mind: Ben & Jerry’s, Tom’s of Maine, Zappos, Starbucks. Philanthropy and commerce can successfully co-exist, and in many respects the former has a direct causal effect on the latter. Even more companies underwrite socially responsible causes for PR or goodwill purposes, but those causes are not necessarily woven into the companies DNA like the companies listed above. I think in today’s biz and political environment, where there’s a push to make “deals” and drive economic growth, socially responsible companies will increasingly standout. It’s not a bad biz strategy in an era of parity product.

      1. awaldstein

        It is not acceptable for those few tech companies who basically rule our world to not be in my opinion.Their scale is so large likewise their impact on change could be as well.I think the social scale will swing against them.Amazon is a problem as they could do the most good, can’t really live without them and they do the least. In fact, do the most harm.A conundrum.

        1. PhilipSugar

          What I don’t understand is why they don’t use their logistics like Walmart to help out in disasters. You watch when their is a bad hurricane, Walmart literally convoys them it is a sight to see going down the highway, from their main East Coast Warehouse in Delaware. Then they just pass the stuff out from the back of the truck.That is my point. I’d have to think about Facebook.Let me give another example: Let’s say you really care about giving people clean drinking water in Africa. That is a really noble task but I don’t think a company should give millions of dollars for that.On the other hand. If you are GoreTex and you make the filtrates, and an employee Jill comes and says I really believe in the cause I think we could design a low cost device, can we get the support of some engineers and use a line with production volunteers to make?Hell yes. You can send out an all hands email, ask people that want to give their talent and time and the company gives the raw materials, the use of the line in downtime, and the shipping costs.

          1. awaldstein

            It starts with giving a shit.If they simply–as an example–moved to using non wood based or recylcled cardboard and no plastics in their packaging that would have a measurable impact on deforestation and climate control and the health of the oceans. And after capitalization add no cost most likely.If they simply purchased their largest distributor to Whole Foods–UNFI–they would put a solid 20-30 points back into the profit on most goods sold not a 365 brand. Then used that margin to automate and scale organic produce agriculture they could change the cost equation of producing organic food for each and every customer who does and will shop there as prices drop.Why they don’t–easy to guess from the outside but i don’t get it.

          2. PhilipSugar

            Yup, don’t get it. I mean Walmart is cheap. And I don’t believe in charity for PR, but as you come up on that 20 or 30 tractor trailer convoy you start hearing the honking from the cars the fists pumping and thumbs up from the car windows as people show their support.

          3. JamesHRH

            You need an intro to Bezos.

          4. awaldstein

            He knows this it just doesn’t matter to him.Maybe i’ll make my Saturday post and open letter to him and email to him.It will make me feel good more than make a difference.

          5. JamesHRH

            Budweiser cans water, as another example.

          6. PhilipSugar

            Another great example. We are going to run our lines which can more beverages than anybody else in the world hard, use our fleet of trucks and just give it away.

          7. ShanaC

            they stole that from oscars blues

          8. PhilipSugar

            Shana you are woefully, terribly wrong. Bud has been doing since 1988. 379mm cans. Hey great for Oscars Blues. But you are wrong. Dead wrong.

        2. Donna Brewington White

          I love the benefits of using Amazon. But I am more open than ever to alternatives.

          1. awaldstein

            I buy almost everything from them–from paper towels to wine glasses– and more and more they show up as the payment method on etail fashion brands.Truly challenging to not use them.I like them and he is quite astounding but I’m just not getting around that we as people have made them, Google, Facebook and Twitter the world.Starting to think that they in turn owe us as a civilization something in return for my data and money.Sure–business is business.Maybe it is more though.

          2. @mikeriddell62

            There are moves afoot for us as society to own and monetise our own data in a shared business model with a shared purpose and common operating system. Platform cooperatives are the most visible. People are coming together to hack the system. We can live in hope!

          3. awaldstein

            i believe this and do.if there are platforms of communities i should know about, please let me know.

          4. @mikeriddell62

   is nascent prototyping off line in 2 UK working class communities. Might be worth a look. Disclosure: it’s a charity (and I’m involved!)

          5. ShanaC

            there’s actually a whole brand of seo for just amazon search. There are now more intent to purchase searches on amazon than google

        3. Adam Sher

          You deleted your other comment that I was responding to. This one is similar.The social scale as represented by consumer behavior will need to change particularly w/r/t Amazon and Apple. The market tolerates irresponsible corporate behavior because it values revenues, sometimes profits, and ignores costs (particularly externalities).The small amount of “socially responsible” investment options are laughable, and often serve their own unscrupulous positions (e.g. BDS).

          1. JamesHRH

            People like lower prices. That is tangible. Deforestation is conceptual, for example.

          2. Pointsandfigures

            Ironically, there are more trees around the world today than there were 100 years ago.

          3. @mikeriddell62

            You’re right. There are very few options. But because there is unmet demand, a market does exist. It just needs developing.

          4. Adam Sher

            Socially responsible investment starts with socially responsible consumption. You can’t buy from Amazon and invest in a basket of companies powered by wind. Your daily purchases vastly overshadow your less frequent investment purchases.

          5. @mikeriddell62

            Socially responsible investment starts with investing in activities that are socially responsible. That you can’t buy from Amazon, correct! It’s not about buying (though that’s part of the rubix cube) it’s about working together to solve intractable problems that the markets ain’t fixing.

        4. JamesHRH

          FB said almost the exact same thing in 2011 that it is saying in 2018, but I think Mr. Zuckerberg is feeling a lot more heat.Generational change brings new values and norms. I think FB will not be able to talk away this storm a third time.

      2. JamesHRH

        Those are marketing decisions. Every example is a commodity product where social responsibility is interwoven with a high quality, higher price point offering.Its valid and a wonderful way to do business but not really what Fred is talking about, I think.

        1. Salt Shaker

          Semantics. Social responsibility is a critical part of each of the above companies marketing and brand positioning, just like w/ Charlie’s Bread company. How many biz today don’t compete in commodity categories? We live in a world of parity product w/ very little brand differentiation. When there aren’t distinct product attributes, which is quite often, it falls on brand image. Social responsibility indeed can be a differentiator, perhaps not as meaningful as desired (re: product) and created by default, but differentiating nonetheless.

          1. @mikeriddell62

            “Brand equity” or “Business Goodwill” might be another way of seeing it but whatever the word, I think you are bang on the money!

          2. awaldstein

            Look at any of the new ecommerce brands like Allbirds to see how they roll that into the brand.Came across one lately that had the data visualized that every year they saved as many trees as there are in Central Park by simply making their external mailer and internal box the same.

          3. JamesHRH

            Not semantics, as the program were not central to the brand at Etsy and they are in your examples.

    6. JamesHRH

      I believe your second last paragraph is known as the Bill Gates Corollary.

    7. Chimpwithcans

      Agree, but profit making does not occur in a vacuum. Often a company’s activity will have impacts that are unaccounted for normally, and require use of shareholder funds. It becomes a hazy moral / brand / feel good thing. Not all CSR initiatives are created equal, some are wasteful and naive, while others are directly related to company activity and feed the brand. I got into this field as a student (Masters in Corporate Sustainability Management) and it has baffled me ever since. There is more noise in a sustainability report than on Twitter!

    8. ShanaC

      I think there are too many negative externalities in the world to have this be true. And I think we need to have real conversations about the economics of negative externalities and the idea of shareholders being effectively exempted from those costs.

  2. David C. Baker

    This is a fantastic topic, Fred. Reading your brief note led to a lot of things just falling into place in my head. I work with a mix of firms that are pure for-profit and some that are B Corps, and such a simple idea like this is transformative: there’s more pressure to run a business well in a B Corp. I love that thought.

  3. Jay Janney

    The famous Milton Friedman article (NYT 1971) was really about Agency Theory–CEOs using CSR for their own personal benefit. That is what drove Friedman’s criticism of CSR.I get concerned by Finance departments teaching shareholder theory because they often overlook that shareholders are residual claimants, paid out after the fixed claims are first settled. Maximizing their value after the fixed claims are settled does not conflict with the values of the fixed claimants.A firm which includes elements of CSR as a fixed claimant, I have no problem with if they disclose it up front, so investors can decide accordingly.

  4. Tom Labus

    Does the VC then turn down an investment that could be a home run for social reasons? Does the VC pitch this social aspect to their investors?

  5. @mikeriddell62

    Very pleased to hear this Fred.There is one innovation missing in the markets right now, and that’s a standard and universally recognised measure for social impact.If we had that then the markets could invest in its production.Think about it. Why did the mile get standardised as a measure of distance, or the kilogram as a measure of weight?What was the need at the time?Who got who together to have the debate, or did it just emerge as a response to an unmet need?When both the markets and the producers have an established and common measure, we will be able to birth a new form of token that stores the value created, and enable trades to become more ethical.

    1. Pete Griffiths

      “There is one innovation missing in the markets right now, and that’s a standard and universally recognised measure for social impact.”IMHO Impossible. You can’t distill the many factors that could bear on impact into one number. Or to be more accurate, you can but it will be highly misleading.

      1. @mikeriddell62

        Well I believe it is possible. An action has a net positive outcome or a net negative outcome. Positive actions can and should be different but they will be mutually reinforcing.Think of it like binary. Though I’m not a computer boffin – but don’t you guys code your language in one’s and zero’s. I guess I am suggesting a whole new language that is universal in its understanding of what impact looks like.Perhaps I’m a dreamer, but I’m not the only one…

        1. sigmaalgebra

          > Well I believe it is possible.Occasionally, yes. Otherwise, not even a tiny chance.(A) Let some people live in poverty, disease, and starve or (B) solve those problems but destroy some forests, lakes, rivers, wildlife, etc.?(A) Save some sea lions but hurt some fish stocks and Native Americans who depend on those stocks or (B) save the fish, keep the Native Americans happy, but kill off a lot of sea lions?(A) Let energy prices rise and the economy be hurt, with more unemployment, poverty, disease, crime, etc. or (B) drill for oil in the Arctic and get the energy but where a spill could pollute the environment and wildlife for decades?More generally, commonly there are multiple, incomparable criteria. This situation is so serious that there is a field of research — multi-objective optimization. In simple terms, have to settle for non-inferior and/or Pareto optimal solutions.More can be done with utility theory, but that field is one more in applied math where could learn what to do if had a lot more data than have any chance of having.

          1. @mikeriddell62

            I’m simply arguing that there is an abundance of resources out there being wasted. People without work but time on their hands. Bus operators with unsold tickets. Shops that are empty. we need a marketplace like UBer or Air BnB that matches these unused resources with unmet needs.For that kind of clearance market to work, it needs a medium of exchange and unit of account (the measure of success) that can unlock the value, store it and trade it.Since currencies are asset classes, what we’re talking about is a new social impact investment product. One that gives the creator of the token a proof of stake in the community and the ownership right to do work that is validated with transactions (the markets).A reputation token if you will. But it requires consensus on what work is considered good, and what isn’t.In other words, it’s not mined into existence like Bitcoin or lent into existence like money, its earned into existence for contribution to the common good.Just a more resourceful way of being.

          2. Pete Griffiths

            You can’t do more with utility theory in this context and more data just makes matters worse. You were spot on with your points A and B. 🙂

        2. Pete Griffiths

          Net positive outcome on what axis?

          1. @mikeriddell62

            We work it on the inputs. The inputs of time contributed by under-employed individuals for activities that we the community have agreed – after discussion, debate and agreement – make a positive contribution. Community action and volunteering for example.The outcome is therefore engagement of the disengaged. Make sense?

          2. Pete Griffiths

            I’m afraid not. Exactly the same problem arises. The inputs have to be quantified on the same axis as the objective function. And nobody knows how to measure ‘utils.’

          3. @mikeriddell62

            I’m afraid so. Our community values everyone’s time contribution equally. We define the activities we want to secure before we start measuring and then we standardise measurement using a token system based on the time contributed by individuals.we’re not saying it’s perfect, neither are we saying that you or anyone else has to do it this way either. All we’re saying is that this is the way that we’ve decided to record social value – at least we understand what we’re talking about without the need for jargon.

          4. Pete Griffiths

            Go for it Mike. 🙂

  6. Pete Griffiths

    “…any mis-steps will be viewed as the cost of the double bottom line.”Deeply true.

  7. maxniederhofer

    I’d propose that it’s hard to be long-term high-performing without being socially responsible or having some other purpose beyond “being high-performing.” Even Goldman believes (at various levels) that they’re doing “God’s work”; so does Uber I think.The problem of impact investing as I’ve seen it is more that it’s just not good investing because it believes the commercial is opposed to the ethical. I think nothing could be further from the truth. Good companies make good products, are good workplaces, make good customers and suppliers, are good citizens in their communities, etc. etc.We forgot this for a while, led by “shareholder value” and HBS and Wall Street, but we’re remembering it and I think more and more people are investing their money that way. That’s a very, very good thing.

    1. @mikeriddell62

      Agree 100% – society (the markets) increasingly of the same opinion.

  8. PhilipSugar

    It is an interesting topic.I view it primarily as a marketing investment in employees. Because you do have to have some mission outside of work. I mean if all you cared about was pure results, you could say people are never allowed to bring up any activity they do outside of work at the office. Only work topics discussed.Well that would be a miserable place to work.Now I don’t agree with forced missions like giving to the United Way or forcing people to support a certain charity.I also don’t agree with a CEO giving a ton of shareholder money to their pet cause.But if you give some money that leverages the ability of your employees that want to give then great. We support Lego League and Zip Code Wilmington. Remember the three T’s of charity: Time, Talent, and Treasure.I will post a picture of the Toyota booth and the wearable robotics conference today. They give money so their employees can work on mobility solutions for the disabled.Now you could say: There is no reason that money shouldn’t go to stockholders.That’s a short term view. They are building their culture which attracts and keeps talent. That in the long run means they are getting a return on that investment which is what they owe their shareholders

    1. LE

      They are building their culture which attracts and keeps talent. That in the long run means they are getting a return on that investment which is what they owe their shareholdersI can buy into an argument like that. But the devil is in the details. And it assumes like with anything else that the attention, money and time devoted to the activity doesn’t detract from anything else. In that sense it has to be viewed as almost an employee perk. The same reason that you would provide food or coffee or a nice office environment or other benefits (private jet). And speaking of private jet look how quickly stockholders react that it’s a waste of their money even though it is certainly done to ‘attract and keep talent’.And look how quickly people and the media are quick to demonize money spent where they personally don’t see a benefit or don’t benefit or don’t care. For example Ben Carson’s $31,000 dining room set for his office. Meanwhile the government pisses away all sorts of money with reckless abandon that nobody questions or is even in a position to question. It’s so absurd on it’s face.My dad with his shitty wholesale district office used to think that it had no impact on the quality of the employees that he was able to attract. Well of course it did. Of course if you are a low paid person you’d rather work for low pay in a shiny office building with fresh carpet and free coffee. And of course people will work for peanuts for a bank if they get a VP title and can feel important.So the question really boils down to bang for the buck because after all this is business. What amount spent has the greatest impact. The fact that I like boating or skiing doesn’t make it a good business decision to offer employees a ski trip over another benefit in order to ‘keep and attract talent’. (It might be but would require a bit of research to verify..)

      1. PhilipSugar

        I have come to agree on the offices. Don’t get me started on the junkets. But yes people love them. It is a perk. And yes it will divert some resources. But that is no different than letting people talk about their weekend, or the game, or whatever.

    2. PhilipSugar

      It is called shared giving. I talked to the Toyota guy who’s booth is below. Funny story I told him what we do and said there are great charities like habitat for humanity but my guys aren’t good at swinging hammers. He laughed and said before Toyota I was a Director there…of course I pick the one charity to use as an example…..what a double coincidence. https://uploads.disquscdn.c

  9. Pete Griffiths

    It all comes down to the same problem. Whether you attribute some measure to the experience of others or ask them to attribute it themselves you can’t have an index unless you have an axis. But a) nobody has ever managed to devise a meaningful such axiis (for good reason). Utility theory and John S Mill’s notion of utility maximization was an early attempt but utility theory is beset with problems. It just isn’t clear what is really meant by utility.b) some have nonetheless devised proxies for national utility. Notably Butan…c) even if it were clear what utility was Arrow has made it unambiguously clear that there can be no rational optimization once you move beyond the individual.…It sounds like a great idea but it’s fool’s gold.

    1. Lawrence Brass

      Bhutan’s Gross National Happiness Index was an interesting read, thanks. It is interesting that the initiative has monarchy roots.Someday we may have a big data fed instant index of happiness, using the same techniques and tools that some are using to hack democracy.

      1. Pete Griffiths

        It’s almost certainly an impossibly hard problem and sadly I am confident that even if there were a big data “solution” it would be hijacked and abused.Call me cynical. It’s the cross I bear. )

    2. @mikeriddell62

      Instead of measuring the outputs, try the other way around – measuring inputs…easier to define and measure good ones

      1. Pete Griffiths

        It doesn’t help.In fact, if you think about it, this suggestion is implicit in any attempt to maximize anything that looks like utility.

  10. jason wright

    it’s about what happens to the profits. if it just funds the lifestyles of an elite class to buy yet more ski chalets and beach houses and cryptokitty images then there is no ‘responsibility’. it is distasteful decadence. it is not globalisation. it is ‘gobble…isation’.

    1. Matt A. Myers

      A world with democratic voting for all decisions, where all profit is decided upon by each individual, would be a beautiful, thriving world – universe, abundance vs. scarcity that capitalistic structures have controlled to create.Elon wants democratic voting for Mars colony – I wish him the best in that endeavour to combat the ego-greed power that currently has Earth in its grasp.

      1. SFG

        I wish everyone the best in that, as there probably won’t be anyone alive to vote. Earth is a special place that works perfectly. Anything that man makes to support himself will break.

        1. Matt A. Myers

          There are people working on solutions, who understand these systems and know how to help them evolve. Have hope, work towards solutions or to stand with and support those who are making change.

          1. SFG

            I wish ’em luck. But if man were in charge of holding planet earth together, we’d all be dead by now! Take it easy.

  11. Kirsten Lambertsen

    How odd that ‘first, do no harm’ is a revolutionary idea in business. The idea that a company doesn’t have to be responsible for its actions unless it’s blatantly violating the law (even then, it only gets a fine), defies common sense. Really.Come at me, ha ha!

    1. Matt A. Myers


    2. Lawrence Brass

      Ethics, for some, is some forgotten course taken at college.

      1. Pointsandfigures

        Ethics is also super subjective. My issue with B-Corps isn’t the social good. It’s that there is no quantifiable standard to compare two companies that is 100% objective like GAAP. It’s a worthy goal, but needs to be quantified with nice dark lines.

    3. @mikeriddell62

      At last, a feminine voice on this blog. Yay! More please Kirsten!

      1. Kirsten Lambertsen


      2. JamesHRH

        Define ‘feminine voice’.

        1. @mikeriddell62

          Think cuddles

    4. JamesHRH

      No consumer pkgd goods company fits this comment K.

    5. JamesHRH

      This is a toughie, as the energy biz in Alberta recently agreed to the concept of a social license, led by its socialist leaning provincial government’s belief that the federal government would help with the infrastructure issues that plague the province.They have found out that their progressive neighbours in British Columbia can never be satisfied and and the feckless federal government is too scared to step in and do their job (approve pipelines).The engine that drove Canada for the last 15 years is now unable to get their oil or LNG out of Alberta ( you would not believe how much natural gas exists in NW Alberta / NE British Columbia).The province is now an economic shit show and the debt has gone from 0 to 15% of GDP (in like 3-4 years).So, its the old adage that you must define what will satisfy the customer before you agree to anything, because, making customers happy can be a slippery slope.Customer Service Bible, FYI –

  12. Matt A. Myers

    I’m fine with blockchain platforms and technology – and people paying for the value that they provide – I’m not okay with the additional reallocation of wealth that happens after transaction occurs – via the Ponzi-Pyramid structure of the most successful crypto-assets. I’m not fine with the subtle and essentially hidden increase in cost to consumers, which is promoted as a feature by the for-incentivized blockchain community.How is supporting and perpetuating these structures socially responsible? This puts it at even bigger odds with the unreasonable amount that will be reallocated based on how adopted these schemes become, the more adopted they become. E.g. I’d love to see the spreadsheets and projections of how much any individual or company will “profit” from society if say Bitcoin becomes worth “$1,000,000” per “coin.” What’s it look like in 10 years, 20 years, 50 years, 100 years based on different adoption levels, etc?As Albert has stated: the other method of adoption is State/government-mandated use of blockchain, which then would allow the removal of the incentivized structure for its full adoption; I’ve been wanting to find the video of his talk that he posted to Continuations so I can reference it. Obviously the reason VC is going this avenue is because VC can’t profit or capture from global holistic value creation/change, unless they attach something like a Ponzi-Pyramid scheme into the transactional layer they want everyone globally to adopt.The proper way to create this collaboration, of having everyone use a transactional layer based on blockchain, is through building relationship, trust, and through governance – government elected by an educated people; knowingly lobbying regulators and politicians etc when the general population isn’t educated enough to understand the holistic long-term impact of everything is taking advantage of people – it’s disgusting, which is why people also want money out of politics.Society (soci-al responsibility) has been taken advantage of enough.This is almost like the Housing Bubble, except that bubble had a collapsable point. The people, any individual, or organizations in the Bitcoin et al ecosystems can do nefarious things to keep its adoption by a society continuing, and no additional money needs to even go into the system where it “dies” (“Bitcoin has died 269 times” –… – because the people who bought into it will just “HODL” until the people with the most “profit” to gain / reallocate from society will manipulate whatever they need until they get the ball moving again in the direction they want.I get your/USV investment rationale in part is likely “well, if it turns out that these are considered Ponzi-like schemes – then at least we invested in blockchain technology and can support other non-incentivized blockchain currencies” – though if you’re not admitting the truth from the beginning, and we all know fiduciary responsibility doesn’t give a shit about social responsibility (potentially unless you’re a B Corp?) – then it’s immoral, if not criminal.William made a scary comment the other day too –… – that it isn’t regulators that come up with laws, they simply enforce them — and surely all of these growing body millions of people vested in these incentivized crypto-asset ecosystems (Bitcoin holders etc) will push for legal adoption, so they can continue adoption and have society’s wealth reallocated towards them.Keeping the blinders on and manipulating/lobbying regulators to understand your biased education on this all … is many words come to mind – mind-blowing.I posted a longer comment relating to this on a post from a few days ago –…And it looks like many USV portfolio companies – which makes sense based on proximity and group think – are being indoctrinated into ignoring the Ponzi-Pyramid scheme structure of crypto-assets like Bitcoin, Ethereum’s Ether et al; “Twitter CEO Jack Dorsey Says Bitcoin Will Be the World’s Universal Currency” –… — so clearly Twitter won’t take a stand to protect and stand with society relating to Bitcoin like they did with their #MeToo ad campaign (….The worst part relating intellectual integrity: Fred and no one else on AVC or HN – nowhere – is engaging to counter specifically what I or others say when it’s negative or shining light on the whitewashing and straw man arguments — no one engages to spend the time to show or share as to why perhaps myself and others are wrong and overreacting? Being ignored (ignorance) and shallow, non-critical statements (the same kind Trump and other “career politicians” use to rally support with hype) won’t cut it, where’s the deep analysis trying to show what we say is true — and then overlaying why it apparently isn’t true – presenting to us that this isn’t just a pig that they’re disguising with lipstick; no offense meant to real pigs.There’s lots of money and people incentivized to not look at the whole picture, there needs to be a substantial and diverse amount of people and resources allocated to shine light on everything clearly. The beast is in the mainstream – and it’s not educating the population.I’m trying to put together a longer post to put on my blog, mostly related to my life though I’ll touch on Bitcoin et al – because life has been a struggle the past 2+ years because of chronic pain, and I need to try to get the accumulation of my thoughts out.

  13. Good Guy Fred…Fred is fantasizing.It is “dog eat dog” in the USA these days. The time from FDR until the Reagan Revolution was a brief respite from Social Darwinism for many Americans. Fred talks a good game, but more or less, he seems to play his cards like most VCs. Perhaps he’s a bit for genteel, but when, say, heads need to roll and quarterly number need to be puffed up a bit, I doubt very much that Fred acts significantly differently than his fellow VCs.My sense it that after Fred secures his loot and theb assuages his conscience with some “feel good” philanthropy. Many of the robber barons did essentially the same thing.“Good Guy Fred” is a nice marketing tool. But when push comes to shove let’s remember what it is that VCs actually do for a living: they crush the competition or they are crushed themselves. It’s a nasty zero sum game they typically play.

  14. cryptoboi88

    I define social responsibility as not casting a necromantic spell (like a dodgy token sale) on a dying portfolio company (*cough* Kik *cough*) and screwing over legions of retail investors.

  15. Pointsandfigures

    I like it when companies distribute money to shareholders and let them choose what to support and what not to support. I think companies can be “socially responsible” in a lot of ways. Hey, oil companies get crude, refine it, and deliver it to you so you can get to work, the hospital and law enforcement can get around and protect you. So there is even social good in companies not normally associated with it.

  16. Pointsandfigures

    Here is a link to an interesting study on stock buybacks:… I blogged about it. I wonder if stock buybacks come from the same “principle” as corporate social responsibility. (Of course, dividends and stock buybacks are equivalent when it comes to corporate finance theory) The reason I say this is a centralized bureaucracy is deciding for me. It turns out C level execs make shitty investments (including corporate VC) Does the same happen when a corp decides to put shareholder money into a project it views as socially responsible?

  17. Sudha Lakshmi

    Too often the discussion of impact investing focuses on the question of returns: can one invest in socially responsible companies without sacrificing top-tier returns? I’m certainly with Fred in thinking that returns don’t have to come at the expense of social responsibility.But there’s also a different point to consider here, and that is risk. And at least in the small-and micro-cap space we deal with, socially responsible companies present far less risk to the investor in one very important respect: founders and managers of small, mission-driven companies tend to be very good actors in a space where one really has to watch out for bad actors!