262ventures.com

At 26.2 Ventures we believe that the market in developing nations is a large one. The market sits at the cross-section of altruism, technology, and free-market economics. The last point is cloudy for some as most ‘relief’ or ‘aid’ products aimed at developing nations are viewed as subsidized by governments or NGOs. I see it differently.

Designing, creating, and marketing products for a developing nation market necessitates a low-cost objective because, flat out, the national economies have not grown sufficiently enough to leverage scale enjoyed by developed countries. Thus product development, technological advances, and distribution have to be accomplished with this “low-cost” dogma in mind. But does this stray far away from the doctrine of Fortune 500 global manufacturers? Indeed selling world-class CT scanners and selling Lifestraws should not have very different goals: costs should be driven down so profits can be maximized and reinvested in the companies, resulting in continued improvements that should enhance the well being of all people. Indeed paucity encourages elegance. Who wouldn’t want the best solution per buck after all?

On a side note: the Lifestraw addresses one of the fundamental problems of water: distribution. The large infrastructure required to purify water, typically available only to major municipalities, has been miniaturized to the size of underwater hockey stick, enabling efficient distribution of clean water at the point of consumption. Awesome!

Chris Anderson, of The Long Tail fame, has written an article in Wired regarding the economics and value-add in markets of free products.  The article provides an excellent framework for tearing down the notion that free = no value and is a must read for those transacting in information products (web, media, etc.).

The introductory anecdote regarding King Gillette and resulting discussion of “giving away the razor to sell the blade”  inevitably lead me to think about the byproduct of massive ‘free’ distribution: waste!  Clearly this is an issue that the physical world deals with (billions of razors indeed = trash and recycling) but it is worthwhile to consider the parallel along information products.  For example: when a specific event occurs, hundreds of media outlets, bloggers, and journalists sprint to cover this event leading to informational clutter, albeit with some differences perspective and opinion.  Where is the ‘trash and recycling’ industry for the information world?  Where are the tools to help organize all this data and information?  How do we eliminate redundancy?

My guess is that there is an extant market for these tools whose growth will only accelerate, both in physical and informational worlds.  One’s trash is another’s treasure.

My beloved alma mater, with its college hoops programs ranked #7 (women’s) and #9 (men’s), decided to increase their endowment disbursement to increase the amount of financial aid to middle class families of undergraduate students. While I would argue that even more should be done to make education and access to private universities even more affordable (as they sit upon huge piles of endowment green), I think it is awesome that Stanford is leading the way.

Umair Haque writes that many political, economic, and social systems are in place to provide a direct transfer of wealth from those with less to those with more . Stanford sits on over 15 billion , owns thousands of acres of sprawling Bay Area landscape and real estate, engenders lasting and successful symbiotic relationships with local companies, and has a vibrant and productive research community. Stanford is the archetype of ‘have more.’ However by recognizing that the direct deployment of financial resources towards enhancing educational access to a more economically diverse population, the University has taken a step to reverse the sign in the wealth-flow equation and close the wealth gap. While this may seem altruistic to some, I think there is a clear economic benefit for the school: Stanford is investing in assets that have the best risk-adjusted rate of return… its people!

Only time will tell, but I’ll venture a guess that Stanford will benefit significantly more than the the near term loss in its endowment from continuing along such directions. I hope that other universities will follow suit.

This site is now home to 26.2 Ventures LLC’s discussions regarding politics, economics, technology, and business building. It will occasionally include some chat about music, literature, long distance running, and our personal adventures. We will be sharing some thoughts on the ventures that we are pursuing and actively working on. We hope that any resulting discourse will prove useful to all parties.

This forum arose from Erik and I sharing offices during our years in grad school blathering away while procrastinating from our theses. Some of the topics we considered then: numerical optimization of suicide-no pass spades, computer driven wedding seating methods, determining the amount of force required to disturb the AFM (atomic-force microscope) next door generated during a full contact Nerf basketball game.

Erik’s posts will be much more entertaining because he’s just that kind of guy. We hope you enjoy it!